Electronic products are one of Vietnam's potential export groups, but the supporting industry sector still faces many difficulties.
Localization rate is not high
According to the latest data from the General Department of Customs, from the beginning of the year to mid-October 2024, the export value of computers and products Electronics and components reached 55.29 billion USD, an increase of 11.67 billion USD, equivalent to an increase of 26.7% over the same period in 2023. The export value of all kinds of phones and components reached 43.94 billion USD, an increase of 2.31 billion USD, equivalent to an increase of 5.6% over the same period last year.
Accordingly, the export value of these two groups of products was double that of the third group of products, which is machinery, equipment, tools and spare parts; and more than three times that of the textile and garment group. Therefore, the Government has also identified this as a key industry in the modern economy and has a strong impact on other industries.
Regarding this product group, Ms. Do Thi Thuy Huong - Member of the Executive Committee of the Vietnam Electronics Business Association said that Vietnamese enterprises can produce many mid-range and high-end accessories. The position of electronics enterprises in the supply chain is increasingly enhanced. " In 2023, the total export turnover of the electronics industry is 109 billion USD. With the growth momentum of the first 9 months of 2024, the growth rate compared to the same period last year reached 10%, it is forecasted to increase to 120 billion USD this year " - Ms. Do Thi Thuy Huong said.
However, Ms. Do Thi Thuy Huong pointed out that the problem is that Vietnamese electronics enterprises still focus on processing and assembling, and have not focused on creating supply chains or developing segments such as design, research and development (R&D), distribution, etc. to create higher value-added products, creating spillover effects for other supporting industry enterprises to develop together.
From reality, Dr. Mac Quoc Anh - Vice President and General Secretary of Hanoi Association of Small and Medium Enterprises (HANOISME) frankly said: Supporting industry for the electronics industry is currently at a modest level, accounting for only 36% of enterprises participating in the supply. Currently, electronic products, especially technology, are constantly changing. Every 3-6 months, new products are launched. In addition to hardware products, software products are updated and changed by large, multinational enterprises and corporations according to consumer trends.
Besides, Department of Industry (Ministry of Industry and Trade) also stated that the speed of digital transformation in Vietnamese enterprises operating in the electronics industry is currently very low. The number of enterprises willing to invest in digitalization is not large. Therefore, the electronics supporting industry still needs to have greater breakthroughs in the future. Domestic enterprises need to participate more in the global value chain, establish a supporting industrial ecosystem and be able to join hands with large international technology corporations.
Need policy support with strong enforcement
According to the Vietnam Electronics Industry Association, China is currently the second largest export market for Vietnam's electronics industry, after the United States, and is also the largest supplier of raw materials and components for Vietnam's electronics industry, accounting for 80%. Therefore, the Chinese market plays an extremely important role for Vietnamese electronics businesses.
The wave of production and investment shifts by Chinese enterprises and other foreign companies to Vietnam has both advantages and challenges. The challenge is that competition in the domestic market will become increasingly fierce. However, this is also an opportunity for Vietnamese enterprises to cooperate, form joint ventures and improve their technology and corporate governance, as well as access investment capital through joint activities.
To overcome the above difficulties, Dr. Mac Quoc Anh recommends strengthening links and cooperation with partners in countries with core industries such as the US, Japan, Korea, etc. Along with that, policies need to have more specific regulations on receiving advanced science and technology transfer, helping businesses quickly access technology and improve competitiveness.
Sharing the same view, Mr. Nguyen Van - Permanent Vice President of Hanoi Supporting Industry Enterprises Association (HANSIBA), to enhance the ability to participate in the electronics industry supply chain, Vietnam's electronics industry should first focus on implementing a number of solutions such as solving the problem of shortage of qualified suppliers to supply to current electronics factories in Vietnam.
Second, it is necessary to enhance the capacity of enterprises and their ability to absorb technology in order to take advantage of FDI capital flows, shifting their focus to participate in higher stages in the supply chain, first in the region and then in the global value chain. In addition, it is necessary to promote investment attraction in the field of electronic chip manufacturing as an input for the integrated circuit and semiconductor manufacturing industries.
Tuesday is to promote trade to export finished products to potential markets that are tending to increase imports of electronic products from Vietnam.
Wednesday, Take advantage of new generation free trade agreements to improve technology and quality of input materials and components, increase technology absorption and develop the domestic electronics industry.
Proposing additional solutions, Ms. Do Thi Thuy Huong said that the current support policy for the electronics industry is Decree 111/2015/ND-CP, which provides support and incentive policies for the development of supporting industries, but is still limited in development. The Ministry of Industry and Trade is drafting the Law on Key Industries, in which supporting industries are included as one of the important and central items of the development strategy for the coming period.
" Therefore, I hope the Law on Supporting Industry will be issued soon so that the industry, especially the electronics industry, can develop and soon participate deeply in the global supply chain, " said Ms. Huong.
To proactively and rapidly and sustainably develop the electronics industry today, the Department of Industry believes that it is necessary to focus on supporting a number of promising Vietnamese enterprises in the electronics sector to create opportunities for these enterprises to develop and play a leading role in the domestic electronics market.
By 2025, to develop the electronics industry, the Ministry of Industry and Trade will coordinate with relevant agencies to strengthen measures to protect the domestic consumer electronics market (such as defense taxes, technical barriers, anti-trade fraud, counterfeit and smuggled goods, etc.).
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