Vietnam: A new bright spot in global electronics supply chain

Accordingly, not only serving domestic demand, enterprises in the electronics supporting industry are expanding operations in the international market. With strong investment and technology transfers from “giants” in the electronics industry, Vietnam is becoming an important link in the global supply chain.

Vietnam is gradually becoming an indispensable link in the global electronics supply chain

The electronics industry in Vietnam covers many areas, including the manufacturing of components, accessories, processing and assembly of complete products. In particular, the manufacturing and processing of components is taking up a majority of the investment structure, reflecting the great demand from international corporations investing in Vietnam. Although the number of projects on completing final products is somewhat smaller, the amount of investment capital poured into these projects is very large, demonstrating the interest of investors who have always considered Vietnam as a major production center.

According to Tran Thanh Hai, Deputy Director of the Foreign Trade Agency under the Ministry of Industry and Trade, Vietnam is gradually becoming an indispensable “link” in the global electronics supply chain thanks to strong investment from large corporations such as Samsung, Apple, LG, and Intel.

“The shift of global supply chains from China to Vietnam is the result of the open-door policy, participation in free trade agreements (FTAs) and efforts to improve Vietnam's infrastructure in recent years,” said Tran Thanh Hai.

Economist Nguyen Tri Hieu assessed that political stability and security are among the important factors helping Vietnam attract international investors in the field of electronic supporting industry.

“In the context of trade tensions between the US and China, many businesses are looking for alternative production locations to minimize risks and Vietnam has quickly become a prioritized destination,” - Nguyen Tri Hieu said.

A typical example is the investment of Kam Kiu Aluminum Group, Hong Kong (China) recently in a factory producing aluminum accessories for electronic devices, smart devices (phones, computer screens, speakers, watches) and auto parts with a total expected investment of US$100 million. Notably, the investor chose Vietnam not only because of the practical support policies from the Government but also because of the increased labor market quality and Vietnam’s active participation in new-generation trade agreements. These factors help reduce tariff barriers for Vietnamese exported products to major markets such as the US, EU and Asia.