Today: 05/06/2023 06:27:41 (GMT+7)

Breakthrough policies needed to develop the electronics industry

The electronics industry is a manufacturing industry that occupies a key position in the economy, having a strong spillover effect on other industries. In recent years, this industry has made great progress, accounting for about 18% of the industrial production value and more than 30% of the total export revenue of the country.

However, about 95% of the export value of this industry still belongs to foreign-invested enterprises. Therefore, regulatory agencies need to research and have breakthrough policies for the electronics industry, to develop more sustainably and strongly.

Breakthrough policies, electronics industry, manufacturing industry, key position, strong spillover effect, great progress, industrial production value, total export revenue

Manufacturing circuit boards at Vietnam Posts and Telecommunication Industry Technology Joint Stock Company at the Hoa Lac Hi-Tech Park.

In the 2016-2020 period, the electronics industry achieved remarkable success. According to the General Statistics Office, exports of electronics, computers and components in this period, grew by an average of 23.8% per year, bringing Vietnam from the 47th position in the world in 2001, to the 12th position, and third in the ASEAN region in terms of electronics exports.

Particularly in 2022, the electronics industry achieved an export revenue of 114.4 billion USD, an increase of about 6% compared to 2021 and accounting for more than 30% of the total export revenue of the country. According to a report from the Industry Department under the Ministry of Industry and Trade, Vietnam's electronics industry has now produced most of its essential products, such as air conditioners, televisions, washing machines, phones, printers, etc.

Domestically produced electronic products are diverse in types, colours, and designs, with good quality, meeting most of the domestic demand and exporting to many countries around the world. The outstanding development of the electronics industry is mainly due to the attraction of large investments from multinational corporations, from the Republic of Korea and Japan, in the field of manufacturing electronic components.

But the consequence is that the industry is also heavily dependent on foreign investors when up to 95% of export revenue belongs to FDI enterprises. The capacity of domestic enterprises is still limited, and the quality and design of products have not met the requirements, so the domestic electrical-electronics market of the country, is still currently dominated by foreign brands.

Besides, the localisation rate of the electronics industry is still low. Most of the electronic products on the Vietnamese market are imported complete units or assembled domestically with foreign components. Although industrial enterprises supporting the electronics industry have participated in the value chain of the industry, they can only provide simple products with low technological value. Vietnam's electronics industry is still at the assembly stage in the electronic production chain.

Explaining the cause of this situation, Deputy Director of the Industry Department Pham Tuan Anh said, that electronic products often have a relatively short lifespan, and often change features and designs, while the capacity of domestic enterprises is still limited, lacking resources to invest in the research and development of products, as well as brands.

Therefore, stages with high value-added content still depend on foreign production chains. On the other hand, due to the low production capacity of domestic enterprises, product quality has not yet met the high requirements of FDI enterprises, leading to a lack of linkages between suppliers and multinational corporations.

After the developments of the Covid-19 pandemic and a series of socio-economic upheavals in the world and the region, Vietnam's electronics industry is facing an opportunity to welcome a new wave of investment, to restructure the value chain in the near future.

Many large corporations in the world such as Apple, Pegatron, Intel, etc., have expressed interest and plan to invest in or expand the production of electronic products in Vietnam, including some products with high technology content. Samsung is also promoting more activities to find and connect with domestic suppliers, to increase the linkage in the value chain of this group in Vietnam.

However, the challenges facing the electronics industry require the State to promptly adjust its selective FDI attraction policy, to effectively take advantage of the wave of production shifting to Vietnam and continue to promulgate policies to support enterprises to improve their competitiveness and promote digitalisation, while focusing on supporting several promising enterprises to develop in the field of electronics, thereby playing a leading role in the domestic electronic market, especially household electronic products.

Deputy Director Pham Tuan Anh said, that in the coming time, it is necessary to develop a long-term support strategy to help transform the industry from simple assembly to manufacturing high-value-added products. First, it is necessary to promote the development of products such as displays, semiconductors and key electronic components.

Regarding electronic businesses, more attention should be paid to identifying core and breakthrough products, to promote the fast and efficient development of the electronics industry, as well as focus their resources to develop products with good competitiveness.

Each business needs to identify for themselves the appropriate product and customer segments, and at the same time, it needs to take into account the ability to catch up with consumer trends, as well as develop the world's common technology in the current era.

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Source: NDO

Breakthrough policies, electronics industry, manufacturing industry, key position, strong spillover effect, great progress, industrial production value, total export revenue
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