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.
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.
In the first nine months of 2017, large enterprises invested much in production technology, machinery and equipment in order to renovate technology, expand the scale thereby increasing a large amount of long-term assets which are imported into Vietnam. 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.
– 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