The fire broke out at about 11:30am and quickly escalated to engulf the entire building, measuring some 120 metres long and about 25m across.
More than 15 fire trucks were dispatched to the scene to battle the flames. They were able to prevent the fire from spreading adjacent buildings, but the entire factory, which was full of flammable materials, was destroyed.
No people were killed or injured in the fire.
In their preliminary investigation, investigators were told that the factory belonged to PK. Inter Park Co Ltd, owned by Worapan Suwanchowit.
About 100 employees, including Thais and foreigners, work at the factory, but no people live at the site. The factory is in operation all day Monday to Friday, with staff turning up to work half-day on Saturdays.
Local residents first learned of the fire when they saw workers running out of the building.
One worker told police that he saw the fire start in a stockroom where thinners and work equipment were stored. The fire spread very quickly, leading the worker to raise the alarm for all workers to get out of the building.
With this information, investigators said they were continuing to their investigation to determine the cause of the fire.
Phuket Vice Governor Thawornwat Kongkaew, who responded to the report of the fire, said that he had been informed this was the third fire to cause damage to this factory, which is uninsured.
Damage caused by this latest blaze is estimated to reach about B20 million, including the work materials and both the furniture completed and in production, he said.
The main concern is the work practices, he added, noting that revoking the owner's license to operate a factory is currently under consideration.
So far investigators believe a short circuit is likely to have caused the fire, though the investigation is still underway, V/Gov Thawornwat said.
Additional reporting by Chutharat Plerin