The electronics industry maintains an important position in industrial production
The electronics industry maintains an important position in industrial production
The electronics industry is a key manufacturing sector in the economy and has a strong impact on other industries. The electronics industry in Vietnam currently accounts for 17.8% of the entire industrial sector, mainly producing electronic products, computers, and optical products. To promote the fast and sustainable development of the electronics industry, it is necessary to clearly define the industry's development strategy, with a focus on identifying core breakthrough products.
Positive growth in the context of the pandemic
Despite being affected by the Covid-19 pandemic, the electronics manufacturing sector has maintained a positive growth rate, demonstrating its huge potential for recovery and development. In the first 9 months of 2021, the production index of the electronic industry for computers, electronic products, and components increased by 7.7% compared to the same period in 2020, with strong growth in mobile phone component production (up 43.6%) and electronic device production (up 3.3% compared to the same period in 2020). However, TV production in the first 9 months of 2021 decreased by 8.7% compared to the same period in 2020. Among the 31 commodity groups with export turnover of over 1 billion USD in the first 9 months of 2021, electronics, computers, and components reached 36.4 billion USD, up 13.1% compared to the same period in 2020, accounting for 15.1% of the total export turnover, and continuing to maintain the position of the second largest export item group of Vietnam (after mobile phones and components). In addition, with the Vietnamese government's initiatives to support the electronic component industry, domestic businesses are expected to make significant progress in production in the near future.
The export structure of computer, electronic products, and components underwent significant changes during the 2016-2020 period. In 2016, the proportion of exported components and finished products was high, with electronic component exports accounting for 65.7% of the total export value of computer, electronic products, and components. By 2020, the proportion had decreased to 59.9%. In 2020, the proportion of fully assembled and semi-assembled product exports increased significantly. Notably, computer and component exports accounted for 27.9%, an increase of 4.8 percentage points from 2016, and other groups such as office equipment increased from 6.7% in 2016 to 7.3% in 2020. The audio and component group increased from 4.4% in 2016 to 4.9% in 2020.
The export structure of electronic products has shown a positive shift, with an increasing proportion of fully assembled and semi-assembled products. In 2020, the export value of fully assembled and semi-assembled products accounted for 52% of the total export value of computer, electronic products, and components and 70% for the mobile phone group. In particular, the proportion of products such as tablets, computer components, TVs, office equipment, and fully assembled phones is increasing. Many technology products such as TVs, tablets, and various types of phones have high rankings in export markets in the region and the world. In 2020, due to the impact of Covid-19, exports faced many difficulties, especially in Vietnam's traditional markets. However, the export value of this group of products still experienced high growth.
Prospects for growth
According to the Ministry of Industry and Trade, in 2021, the electronics industry will continue to grow strongly due to the demand for consumer goods that serve communication and work tools in the context of social distancing due to the impact of the Covid-19 pandemic. In addition, the pandemic has forced electronics and computer manufacturing companies around the world to close their doors. Therefore, exports of computers, electronic components, and products in 2021 could reach around 50 billion USD, an increase of 13.5% compared to 2020.
In the Vietnam industrial development plan for the period of 2016-2020 and vision to 2030, the growth of the electronics industry during 2016-2020 reached 17-18% per year and is expected to reach 19-21% per year until 2030. The goal is to develop the electronics industry into a leading industry and create a support base for other industries to develop. During this period, the Vietnamese electronics industry will focus on developing basic electronic components, printed circuit boards, microchips for mobile phones, household electronics, office equipment, computers, peripherals, components and spare parts for the automobile industry (electronic equipment, lighting, and control devices, etc.). In the period after 2020, sectors such as automation equipment and medical devices will have a high demand for domestically produced electronic components and spare parts.
Experts predict that the wave of investment from foreign direct investment companies in technology into Vietnam will increase sharply after the pandemic is controlled. Increasing investment capital of foreign investors to expand production in Vietnam is synonymous with expanding the growth of the electronics industry in the coming years.
Although the electronics industry is considered a spearhead industry and has achieved some achievements in attracting foreign direct investment, playing a large role in exports, in reality, the Vietnamese electronics industry is still in the early stages of the production chain of electronic products and relies heavily on foreign direct investment companies. Therefore, domestic businesses need to participate more in the global value chain, establish an industrial support ecosystem, and have the capacity to cooperate with large international technology corporations.
