The electronic component industry is the supporting industry which is important to the development of the electronics, hence the development of the Electronic component industry directly relates to the development of the electronics industry.

World’s Total production value has surged since 2012 but seemed to slow down in 2014 and is was 578 billion USD in 2015. This is due to the USD rising along with the interest expectation while the American economy is slow down, which affect the industry development. Besides, the outputs industry – Electronic industry also slowed down due to the plummet of oil price since the second half of 2014.

The global electronics market has long been controlled by developed economies like America, Japan, and some EU countries. Following countries struggled in accessing and participating into the market. In order to do this, they have to pass multinational companies. In the last decade, India and China are named the global workshops; however, recently with the emergence of Vietnam, multinational companies are considering the plant movement to Vietnam due to low labor cost and investment and trade incentives.

In 2014, electronics industry production value was 403 thousand billion VND, accounting for 9.5% in value of the entire industry. Average growth speed in 2010 – 2014 was 29%/year. In detail, although electrical – electronic component production just started to develop in the last 5 years, the growth rate was high, reached 60.5 thousand billion USD of the production value in 2014, equivalent to 15% of the industry as a whole.

Vietnam’s electronic component industry is young and just operates in the outsourcing aspect through importing basic electronic parts and then assembling to specialized ones and then export. Hence the added value is low, only 5-10% mainly due to the advantage of low cost of labor. Currently, domestic electronic component companies almost stay out of the supply chain of multinational companies or at best supply only basic products.

Supporting industry and component production in Vietnam are not yet developed because of the high capital investment requirement. In addition, for a long time, component import tax is below 5% (according to AFTA and WTO), lower than the tariff of import goods to produce the components; hence, leads to the increasing imbalance between assembling and component production.

With the participation of Vietnam into many FTAs in upcoming time, notably TPP, will attract foreign investment strongly, incenting direct investment capital source and the technology transfer, improve management skills, and raise efficiency of business. As the capital continues to flow and Vietnam becomes the choice of many big companies such as Electronics Viet Nam, Samsung, United More SDN.Bhd (Malaysia), Vietnamese enterprises will have the chance to receive the technology transfer from FDI. However, joining TPP allows to less requirements of imports, tariff will be reduced to 0%, making import goods very cheap and will pressure down domestic companies. If Vietnamese policy makers cannot navigate correctly and companies don’t put their efforts to meet demand of TPP market, Vietnam market will be lost to FDI and imported goods.

1.                   Business Environment 7 – 22
1.1 Macroeconomic Situation 7 – 12

Figure 1. Nominal GDP by quarter, 2014 – Q2/2016

Figure 2. Contribution of Electronics industry to GDP

Figure 3. VND/USD exchange rate, 2015 – 6/2016

Figure 4. Average lending interest rate in VND, 2010-2015

Figure 5. The structure of population in working age, 2010-2015

Figure 6. Average wages in some Asian countries, 2014

Figure 7. Vietnam’s labor productivity, 2006 – 2015

Figure 8. Top 10 most exported goods, H1/2016

Figure 9. Top 10 most imported goods, H1/2016

Figure 10. Contribution of Electronics, Computers, Phones and Electronic Components to import-export value, 2010-2015

Figure 11. Quarterly Foreign direct investment, 2013 – Q2/2016

Figure 12. FDI attraction in 6 months of 2016 by industry

Table 1. Large FDI projects in electronics field in Vietnam

 
1.2 Legal Framework 13 – 17
1.3 Impacts of Free Trade Agreements 18 – 22
Figure 13. Commitment on tariff elimination for electronic products in WTO  
2 Industry Overview 23 – 62
2.1 Global Market 23 – 38
2.1.1 Definition and Classification 24
2.1.2 Production Process of Electronic Components 25
2.1.3 Manufacturing network model in electronics industry 26
2.1.4 Methods of manufacturing electronic components 27
2.1.5 Production – Consumption 28 – 30

Figure 14. Total production value of components, 2010-2016

Figure 15. Production & Consumption value of semiconductor device, 2010-2015

Figure 16. Market share of semiconductor device consumption, 2015

Figure 17. Revenue of semiconductor by product, 2015

Figure 18. Raw Material Index For Passive Electronic Components, June 2012 – January 2016

 
2.1.6 Import – Export 31

Figure 19. Import Market share structure of typical goods

Figure 20. Global component import value, 2010 – 2015F

 
2.1.7 Production and consumption situation in typical countries 32 – 37

Figure 21. America’s semiconductor market value 1984-2015

Figure 22. Market share and equivalent value of semiconductor producer, 2015

Figure 23. Japan electronic component market’s production value, 2010-2015

Figure 24. Japan’s electronic component export and import, 2010 – 2015

Figure 25. Japan’s micro electronic circuit import-export structure, 2010 – 2015

Table Korea’s production and export value of semiconductors

Figure 26. DRAM revenue share, Q1/2013 – Q3/2014

Table 2. Growth in production and structure of electronic components towards GDP of Korea

Table 3. List of 10 semiconductor supplier with the highest revenue 2014-2015

 
2.1.8 Leading companies in electronic component industry 38
2.2 Vietnamese market 40 – 62
2.2.1 Industry history 40
2.2.2 The current status of supply chain linkage in electronics industry 41 – 43

Figure 27. Localization rate of Japanese electronic industries in some countries, 2015

Figure 28. World chain value of Samsung and Vietnam

Table 4. Requirements of multinational companies with component suppliers

 
2.2.3 Production technology 44 – 45
Figure 29. Source of technology in the electronic component industry, 2015  
2.2.4 Raw materials 46
Table 5. Metals in some electronic components  
2.2.5 Production 47 – 52

Figure 30. Electronics industry’s production value, 2009 – H1/2016

Figure 31. Electric industry production structure, 2015

Figure 32. Electronic component industry’s production value, 2011 – H1/2016

Table 6. Electronic component production in Vietnam, 2010 – Q1/2016

Figure 33. Quantity of companies and labor in the electronic component industry

Figure 34. Classification of electronic component companies by region 2014

Figure 35. Total capital and fixed assets of the electronic component industry, 2010 – 2014

Figure 36. Revenue and profit of the electronic component industry, 2010 – 2014

Table 7. Some FDI projects into electronic component industry in 2014 – 2015

Figure 37. Electronic Component industry’s index of industrial production

Figure 38. Supply source of electronic components, 2015

 
2.2.6 Consumption 53 – 55

Table 8. Demand of electronics component products for Vietnam’s electronics industry 2014

Figure 39. Electronic component industry ‘s consumption value, 2010 – H1/2016

Figure 40. Top 10 electronic component companies with 2015’s highest revenue

Figure 41. Electronic component industry’s main customers, 2015

Table 9. Canon Vietnam’s electronic component demand

Table 10. Intel’s component demand

 
2.2.7 Import – Export               56 – 59

Figure 42. Electronic components’ export turnover, 2010 – H1/2016

Figure 43. Electronic components’ export structure, 2015

Figure 44. Main export forms

Figure 45. Integrated Circuit Export Market Structure, 2015

Figure 46. Top exports with largest proportion of FDI, H1/2016

Figure 47. Export – import turnover of Integrated Circuit, 2010 – H1/2016

Figure 48. Electronic components’ import turnover, 2010 – H1/2016

Figure 49. IC’s import markets structure, H1/2016

Figure 50. Electronic components import by products, 2015

Figure 51. Top imports with largest proportion of FDI, H1/2016

Figure 52. Enterprises with high phones and components import turnover, 2015

 
2.2.8 Business operation analysis by location 60 – 62
2.3 Industry Risks 63 – 67

Table 11. Minimum wage by region in Vietnam

Table 12. SWOT Analysis

 
2.4 Development planning 68 – 71
2.5 Prospects and forecasts 72 – 76
2.5.1 Industry driving forces 72 – 75

Figure 53. 10 electric products consuming markets with highest growth regarding value in 2015

Figure 54. Revenue and growth rate of the domestic electronic consumption 2015

 
2.5.2 Industry outlook 76
3 Enterprise Analysis 77 – 94
3.1 Enterprise Profiles 77 – 81
3.2 Financial Analysis 82 – 86

Figure 55. Net Revenue

Figure 56. Gross profit and gross profit margin, 2015

Table 13. Sales costs and business management costs

Figure 57. Asset structure

Figure 58. Capital Structure

Figure 59. Liquidity ratio

Figure 60. Activity ratio, 2015

 
Appendix 87 – 94

– WINTEK Vietnam .,Ltd

– Intel Products Vietnam Co.,Ltd

– Dreamtech Vietnam co., Ltd

– HOSIDEN Viet Nam., Ltd

– Flexcom Vietnam Co., Ltd

– Haesung Vina Co., Ltd

– Hanoi Doosung Tech .,Ltd

– Estec Vietnam Co., Ltd