VIETNAM ELECTRONICS INDUSTRY

1. History of establishment and development

- Stages of formation and development
o 1975-1990: Building and developing in the subsidized centrally planned economic
mechanism: In 1975, after the reunification of the country, Vietnam took over a number
of electronics enterprises in the south. Most of these enterprises produce consumer
electronics, joint ventures with Japanese companies such as Sony, National, Sanyo ... and
a few small repair factories. These factories, together with some in the North, formed
Vietnam's fledgling electronics industry during this period.
 After national reunification, on October 3, 1975, the Prime Minister
issued Decision 316-TTg on the establishment of the Sub-Committee for
Electronics Industry Development under the Government and the
completion of the Vietnam Electronics Industry Development Orientation
in 1976.
 Along with that, the Government instructed the southern provinces to
urgently restore and quickly put into operation electronic enterprises
serving domestic needs; At the same time, invest in building a number of
new factories producing electronic components for assembly enterprises.
 In the late 80s, Vietnam's electronics industry was formed with the core
of the Vietnam Union of Electronics Enterprises, with the task of
manufacturing a number of basic spare parts and assembling products for
domestic needs and exporting abroad.
o 1990 – 2010: From the early 1990s, with the policy of reform and integration,
Vietnam's economy began to move strongly towards a market economy. The
Government has adopted open investment policies, promoted the construction of
infrastructure and export processing zones and industrial parks, so it has attracted many
foreign investors to Vietnam, strongly affecting the development of the national
economy and the electronics industry.
 On that basis, Vietnam's electronics industry has started to recover and
thrive since 1994, with the participation of state-owned enterprises,
private enterprises and foreign-invested enterprises.
 State-owned enterprises innovate their operating methods, promote joint
ventures with foreign firms. Many private enterprises were established,
production and business activities are very dynamic. Many famous
electronics companies of other countries have invested in Vietnam, joint
ventures with domestic enterprises or invested 100% capital to build
production facilities.
 New mechanisms, policies and operating environment have created
motivation for Vietnam's electronics industry to recover and develop
strongly. Especially, with the open and open mechanism and attractive
investment attraction mechanism of the domestic market and abundant
 human resources, the electronics industry in this period became one of
the industries attracting the most foreign investment, about nearly 2
billion USD by the end of 2003.
 The average annual growth rate for the whole period 1990-2010 reached
20-30%. In particular, the group of civil electronic products grew strongly
in the period 1991-1995 (35%); The group of spare parts and components
grew strongly in the period 1995-2000 (30-45%); The group of
information technology products grew strongly in the period 2000-2009
(30-50%)... The total output of the domestic electronics industry in this
period also grew continuously.
 Specifically, it increased from VND 4 trillion (in 1996), to VND 68 trillion in
2005 and reached more than VND 179 trillion in 2009. Export turnover
increased 16 times within 10 years. In 1996 started exporting and
turnover reached 90 million USD; in 2004 exported 1 billion 75 million
USD; in 2005 it exported 1.5 billion USD and by 2009 reached more than 3
billion USD. Export products are mainly spare parts and computers.
o 2010 – 2016: From 2010 to 2016, Vietnam electronics industry has integrated with the
regional and world electronics industry, becoming a part of the international electronic
product market through commitments to regional and international economic
integration.
 Electronic products in the world have flooded into Vietnam in various
forms: official imports of components and component kits, official
imports of complete products and products manufactured by foreign joint
ventures in Vietnam.
 Along with the process of perfecting business institutions, legal
framework and a number of incentive policies for electronic enterprises,
Vietnam's electronics industry has made leaps and bounds; the number
of new investment enterprises, industrial production value, categories of
goods to meet consumer demand.
 The electronics industry is concentrated mainly in the Red River Delta
(Hanoi) and neighboring provinces such as Bac Ninh, Hai Phong, Hung
Yen, Thai Nguyen) and the Southeast region (Ho Chi Minh City and
neighboring provinces such as Dong Nai, Binh Duong, Long An). Products
are mainly phones, printers, televisions, of which mobile is the product
with the fastest growth rate.
 According to the General Statistics Office, in the period 2012-2016, the
product consumption index always reached a high level; Especially
increased sharply in the period of 2012-2013 and achieved a relatively
stable increase in the period of 2014-2015, much higher than the general
product consumption index of the whole manufacturing industry.
  In 2016, although the consumption index of electronic products
decreased sharply compared to the previous year, however, if still greater
than the product consumption index of the processing and manufacturing
industry in general.
o 2016 – now: According to Vietnam's electronics industry planning in the period of
2016 - 2020, the growth of the electronics industry in the period of 2016 - 2020
will reach 23.8% / year; Vision to 2030 will reach 19-21% / year.
 In the period of 2016 - 2020, the export turnover of computers, electronic
products and components continuously achieved a high growth rate. The
growth rate in turn of the years is: in 2016 increased by 21.5%; in 2017
increased by 38.6%; in 2018 increased by 12.5%; in 2019 increased by
22.8%; in 2020 increased by 22.8%. On average, the whole period of 2016
- 2020 increased by 23.8%, the production index in this period of
electronics, computers, electronic products and components reached a
higher level than other manufacturing industries at an increase of 13.9%.
In particular, in 2017 reached the highest increase of 35.2%. Since
Q2/2020, the electronics manufacturing sector began to be affected by
the Covid-19 pandemic due to reduced customer demand in key markets,
interrupted supply and postponed or canceled import and export orders,
but the production index of the electronic components manufacturing
industry in 2020 grew at 6.8% compared to 2019.
 Despite being affected by the Covid-19 pandemic, the electronics
manufacturing industry still retains a positive growth rate, demonstrating
great potential for recovery and development. In the first 9 months of
2021, the production index of the electronics industry producing
computers, electronic products and components increased by 7.7%, the
sharp increase was the production of phone components increased by
43.6%, the production of electronic equipment increased by 3.3% over
the same period in 2020. However, the production of televisions of all
kinds in the first 9 months of 2021 decreased by 8.7% compared to the
same period in 2020.
 Vietnam began to strongly participate in the 3C value chain in the
electronics industry since 2010 (including components, assembling
components, finished products) and became the world's electronic
components assembly center. In the group of electronic components,
Vietnam's role in the global electronics value chain is limited to its role as
an integrator of components. But in the finished product group of the
electronics industry, Vietnam mainly produces communication equipment
and consumer electronics. Vietnam has had a strong growth rate of 20%
for finished electronic products, surpassing Thailand, the Philippines,
Malaysia and only behind South Korea in terms of assembly exports in
 2019 and 2020. Vietnam's electronics exports have the highest average
growth rate in the world at 13.9% in the period 2016 – 2020.
2. Actual situation
a. The general situation of the electronics industry in countries around the world
 The top export markets for electronic products in 2019 are China,
followed by Vietnam, Hong Kong, Taiwan, Thailand, Malaysia. Vietnam is
also involved in upstream activities but mainly in low value-added
products such as plastics, glass and packaging. In terms of growth rate,
according to ITC, in the period of 2016 – 2020, China achieved an average
growth rate of 8%, reaching 503.908 billion USD. China is the world's
manufacturing hub of electronic products such as TVs, computers,
handheld devices and other electronics. Therefore, China's production of
some electronic components is the highest in the world, especially
common, medium and low-end electronic components. Meanwhile,
South Korea's electronics exports in the period of 2010 - 2020 only
achieved an average growth rate of 8.6%; Hong Kong market reached
7.6%, Taiwan market reached 10.6%, the US reached 0.2%. Some other
markets in the region such as the Philippines reached 4.9%, India reached
3.7%.
 Some other markets decreased such as Indonesia down 4.1%, Malaysia
down 7.7%; Britain down 1.5%, Slovakia down 5.9%... Meanwhile, the
average growth rate of export value of electronic computers in the period
of 2016 – 2020 was at 21.6%, reaching the highest level in the world.
Vietnam is the 11th largest exporter of electronics in the world and 3rd in
ASEAN in 2020. Export turnover of communication equipment industry
increased by an average of 62%; the electronic components industry
increased by 42% and the computer and peripheral equipment industry
increased by an average of 19%; Other electronics and civil electronics
increased by 39% and 35%, respectively.
 Thailand is one of the largest electronics assembly facilities in Southeast
Asia with more than 2,300 companies with 400,000 employees. As the
world leader in the production of hard drives, integrated circuits and
semiconductors, Thailand is also ASEAN's largest manufacturing base in
the field of consumer electronics such as electrical appliances, the world's
2nd largest air conditioner manufacturer and the 4th largest in
refrigerators. Thailand's electronics industry focuses mainly on exports,
accounting for about 90-95% of manufacturing output.
 According to ITC, Thailand is the 13th largest export market in the world
for computer and electronic products, reaching 34.794 billion USD,
accounting for 1.8% of the proportion in the world in 2020, reaching an
average growth rate of 0.5% in the period of 2016-2020. In 2020,
 Thailand's most important export products were hard drives which
accounted for 29.3% of the value of all exported electronic items,
followed by components, parts and other computer equipment
accounting for 21.9% of exports, ICs accounted for 19.6%,
semiconductors, Transistors and diodes accounted for 7.0%, integrated
circuit boards accounted for 3.6%, and other items accounted for 18.7%.
 Thailand's strength in many products such as radios, televisions and
printers will continue to support its exports in the coming years.
 Japan, in 2020, the total production value of the electronics industry in
Japan reached 89.124 billion USD. Electronic components and equipment
are the leading segment of the Japanese electronics industry, accounting
for about $71.252 billion in total production value in 2020.
 According to ITC, Japan is the 8th largest exporter in the world for
computers and electronic components, reaching 75.592 billion USD,
accounting for 3.9% of worldwide exports, belonging to the group of
export markets affected by the Covid-19 epidemic, the proportion of
exports decreased by 0.3% compared to 2019 with an average growth
rate in the period of 2016 – 2020 at 1%.
 According to Business Research Company, the global electronics industry
is one of the fastest growing industries in the world, forecast to reach
USD 948.78 billion in 2020, to USD 1,055.29 billion in 2021 with a
compound annual growth rate (CAGR) of 11.2%, growth mainly due to
major multinational companies in the world realigning their operations to
recover from the impact of Covid-19, the market is expected to reach
USD 1,291.14 billion by 2025 at a CAGR of 5%. For the global electronic
components segment, it is expected to reach USD 191.8 billion in 2022.
The global consumer electronics market reached USD 689.45 billion in
2020 to USD 989.37 billion in 2027 with a CAGR of 5.3% in the period of
2020 – 2027 due to demand recovery from the impact of the Covid-19
epidemic.
 The Indian market is expected to lag behind China in consumer
electronics manufacturing, followed by Vietnam, South Korea and the
Taiwan market. According to the Consumer Electronics and Electrical
Equipment Manufacturers Association (CEAMA), the consumer
electronics industry in India is forecast to grow at a CAGR of 9.5% from
2015 to 2021, India has a great opportunity to capture a 30% share of the
global consumer electronics manufacturing market by leveraging the
strengths of the pandemic moved production from China.
 The Indian electronics industry comprises 7 main segments: consumer
electronics, industrial electronics, communication and broadcasting
electronics, strategic electronics, computer hardware, electronic
 components, and LED products. While Vietnam has only 4 main
segments: computers, telecommunications equipment, consumer
electronics and household electronics. India is an emerging market that is
a competitor in electronics and computer exports.
 India is setting a big target for manufacturing electronics in the world
with 40% value added to be achieved in the next 10 years. India's current
share of value in global consumer electronics is 3.5%. Given the projected
growth rate of the Indian economy, the contribution of the computer
electronics industry in India to the global computer electronics industry in
terms of value is likely to double to 7% by 2026.
 It is forecast that Vietnam will increase the share of global computer
electronics exports to nearly 4% by 2025. Vietnam can make the most of
the global boom in demand for computers and electronic devices when
the Covid-19 epidemic breaks out. The index of production of computers,
electronic products and components increased by more than 10%.
Demand for Vietnam's export goods will continue to increase in Q4 2021
due to consumer demand for communication items as well as working
vehicles in social distancing conditions due to the impact of the Covid-19
epidemic.
b. The general situation of the electronics industry in Vietnam
With a share of 17.8% in the whole industry, the electronics industry is currently a key
manufacturing industry and is on a strong growth path to become a key industry in Vietnam
- Group of electronics, computers and components
a. Export

The year 2016-2020 is the period when Vietnam's electronics industry has the strongest
development when the export turnover of electronic products, computers and Vietnamese
components grows continuously, with an average growth rate. 23.8% a year. Thanks to this
impressive growth rate, in 2019 electronics, computers and components are Vietnam's second
largest export group - surpassing the textile industry with an export value of 36.3 billion VND.
USD, accounting for 13.7% of total export turnover.

Although the economy was heavily affected by the Covid-19 pandemic, this group of industries
still developed sustainably when the export output of this item was estimated at 44.6 billion and
51 billion USD in 2020 and 51 billion USD respectively. 2021. The main export markets of this
group of products are still the EU, the US and China.
As a commodity accounting for an increasing proportion of total export turnover, the growth of
electronics, computers and components has a significant influence on the overall growth of the
country's exports. If in 2011, the export of electronics, computers and components only
accounted for 4.8% of total export turnover, by 2015 the proportion has doubled, accounting for
9.6% and always maintained the above level. 10% since then (2016 accounted for 10.7%; 2017
accounted for 12.2%; 2018 accounted for 12.1%; 2019 accounted for 13.7%, preliminary 2020
accounted for 15.8% and is estimated to account for 15 in 2021. ,2%). In 2021, exports of
electronics, computers and components ranked second among eight commodity groups with a
turnover of over 10 billion USD of Vietnam. 9%; 2012 increased by 68.4%; in 2013 increased by
35.5%; 2014 increased by 7.5%; in 2015 increased by 36.5%; 2016 increased by 21.5%; in 2017
increased by 38.6%; in 2018 increased by 12.5%; in 2019 and 2020 together increase by 22.8%;
in 2021 is estimated to increase by 14.4%. The average growth of the whole period 2011-2021
increased by 27.3%.

In the first quarter of 2022, the export value of electronics, computers and components is
estimated at 13.2 billion USD, accounting for 14.9% of total export turnover, up 10.1% over the
same period last year. . The major export markets of this group are still the EU, the United
States, and China, in which the export of electronics, computers and components to the US
increased sharply by 17.2%, reaching nearly 3 billion USD.
Although it is considered a spearhead industry and has achieved some achievements in attracting
foreign direct investment, playing a large role in exports, in fact, the group of electronics,
computers and components Vietnam is still at an early stage in the electronic product production
chain and depends largely on foreign direct investment enterprises. Products of Vietnamese
enterprises have not been strongly oriented towards deep processing, have not developed export
products with high technology and gray matter content, and the proportion of processed and
manufactured products with high added value is still low. In the first quarter of 2022, the
industrial production index of the manufacturing industry of electronic products, computers and
optical products increased by 9.4%. These are good signs about the recovery of production and
export of electronic products, computers and components in 2022, forecasting a year of strong
growth and positive contributions of this industry to the country's economic growth. recovery of
the whole Vietnamese economy.
In order for the export activities of electronic products, computers and components to really
develop sustainably in the context of Vietnam's integration with a series of signed free trade
agreements, it is necessary to have solutions to support them. support from government agencies
and businesses. Need to invest attention, consider incentives and support for businesses in the
stages of research, production, trial production and trade promotion programs; review and
finalize legal policies, especially specific regulations on goods of Vietnamese origin; implement
solutions to expand domestic and export markets; strengthen the role and effectiveness of trade
representative agencies and industry associations in trade promotion; seek business opportunities
and expand markets for businesses; promote propaganda and issue guiding documents in order to
effectively implement, take advantage of opportunities to expand export markets and attract
investment from newly signed Free Trade Agreements.

b. Import

Vietnam imports mainly components for production. The main markets that import computers
and electronic components from Vietnam include: China, Korea, Taiwan, Japan, ASEAN
countries, the United States and the EU.
Import turnover of computers and electronic components in the first 9 months of 2022 reached
63.97 billion USD, led by China and Korea with import value of 18.74 billion USD and 18.27
billion USD, respectively. USD.
 -Phone and electronic components industry group
a. Export

During the period from 2010 to 2013, the export turnover of phones and electronic components
increased by 9.2 times, making this group of products a leader in the groups of products with the
highest export value. From 2013 up to now.

In 2021, although the economy is greatly affected by the Covid-19 epidemic, the export turnover
of phones and components will reach 57.7 billion USD, up 12.4% compared to 2020 and
accounting for 17.1% of the total export turnover in 2021.

According to data from the General Statistics Office of Vietnam, in the first 11 months of 2022,
there were 8 items with export turnover of over 10 billion USD, accounting for 70.1% of total
export turnover. In which, phones and components have the largest export value with 55.4 billion
USD - up 6.6% over the same period last year. The export market of Vietnam's electronics
industry is also expanding with the export of phones to more than 50 markets around the world,
including big markets such as China, Japan, Korea, UAE, ASEAN. Hong Kong, India…

With the above results, the group of phones and components continued to maintain its position as
the group with the largest export turnover in Vietnam, accounting for 16.2% of the country's total
export turnover in the first 11 months of the year. 2022.

b. Import
In 2020 and 2021 - when the Covid epidemic was still stressful, due to the high demand for
working from home, the import value of phones and electronic components increased from 16.65
billion USD to 21.4 billion USD. increased by 28.8% compared to 2020 and accounted for over
6.55% of the country's total import turnover.

According to the latest data of the General Statistics of Vietnam, the import turnover of the
phone and electronic components industry group in the first 9 months of 2022 reached 15.78
billion USD from the major import markets, respectively, Korea. China, China to Taiwan, Hong
Kong and Japan.
Difficulties and challenges
Considered to have a lot of potential for development, however, the current electronics industry
still has many limitations and challenges. Although the export turnover of the electronics
industry accounts for a high proportion and Vietnam is among the largest electronics exporters in
the world, up to 95% of the value belongs to foreign direct investment enterprises. external
(FDI). Multinational corporations are playing the leading role, especially the corporations of
Korea, Japan...especially in the field of manufacturing electronic components.
Due to the low localization rate, Vietnamese enterprises have just stopped at the first stage of the
production chain of electronic products, mostly focusing on assembling parts and simple
processing. Most of the electronic goods on the market are imported CBU or locally assembled
with imported components, of low technology and low added value. Partly because the
supporting industry for the electronics industry has not really developed, the competitiveness of
Vietnamese enterprises is still very limited, the quality and design do not meet the requirements
of the market.