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Vietnam's electronic component manufacturing industry – an in-depth overview

Vietnam's electronic component manufacturing industry – an in-depth overview

Saturday 07, 05 2022
Although there were many difficulties in importing components from China in 2021 due to the impact of the pandemic, thanks to a reasonable balance of production and business activities, the electronics industry still grew quite well in both industrial production index and export turnover.

Features of Vietnam's electronics industry

The electronic components manufacturing industry plays an important role in the development of the electronic industry (EI) in Vietnam through the provision of parts and components. By the end of 2020, the number of employees working in this field in Vietnam was about 250,869 people with a total of 858 enterprises.

This industry includes the following activities: manufacture of computers, computer components, communication equipment and similar electronic products as well as manufacture of components for these products. The manufacturing process of this industry is characterized by the design and use of boards and technical application with a high degree of specialization.

manufacture of computers

According to Investvietnam, Vietnam has now exported electronic components to 38 countries and territories around the world. In 2020, China was the largest export market for computers, electronic products and components. The value of this market reached USD 11.1 billion, up 16% compared to 2019, accounting for 24.9% of the total export turnover of this commodity group in 2020.

Currently, enterprises that export electronic components abroad in Vietnam are mostly FDI enterprises. They invest heavily in production facilities as well as apply effective management methods, therefore, products meet most of the requirements from most markets, especially the US or Europe.

Industry growth

According to the Center for Industry and Trade Information (Ministry of Industry and Trade), Vietnam's production index of electronic products, computers and optical products in 2021 increased by 15% compared to 2020. In particular, the production index of electronic components increased by 12.4%; production of communication equipment increased by 10.8%; production of consumer electronic products decreased by 14.9%. Mobile phone output in 2021 reached 233.7 million units, up 7.6%; TV output reached 11.17 million units, down 38.6%; the output of phone components was estimated at VND 480.8 trillion, up 29.5% compared to 2020.

Industry and Trade Information

Regarding the production of supporting products in the electronics industry, there were a number of products with increased output compared to 2020. Specifically, speakers, whether or not installed in speaker boxes, increased by 17.17%; other electrical conductors used for voltage difference ≤ 1000V increased by 11.39%; parts of computers, cash registers, postage-free stamping machines, ticket machines and the like, associated with calculation units increased by 5.89%; parts of other uncategorized electronic components increased by 5.7%; copper coil single insulated wire increased by 3.3%.

In the context of complicated developments of the COVID-19 epidemic, production and business activities in the electronics industry in general maintained a stable rate and grew quite well in the past period. However, although Vietnam is among the 12th largest electronics exporters in the world and the 3rd in ASEAN, about 95% of the value belongs to FDI enterprises. Multinational corporations play a key role, especially those from Korea and Japan in the fields of final products and the production of electronic components.

Currently, the localization rate of the electronics industry is low, most of the electronic products on the Vietnamese market are imported or assembled domestically with the majority of imported components. Each year, Vietnam imports about USD 50 billion of electronic components, while the ability to participate in the global value chain of domestic electronic industry supporting companies is very limited.

 the localization rate

Therefore, it is necessary to create a breakthrough to develop the electronics industry. Specifically, domestic enterprises need to participate more in the global value chain, establish a supporting industry ecosystem and be able to shake hands with large international technology groups.

The investment wave of FDI enterprises in the technology sector into Vietnam is increasing sharply after the epidemic is controlled. Increasing capital from foreign investors to expand production in Vietnam means expanding export growth of the electronics industry in the coming years. Accordingly, it will contribute to promoting the development of the electronics industry and attracting new investors in 2022.

Source: investvietnam, MoIT

Compiled by VietnamCredit

 

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