{"id":401,"date":"2021-07-31T19:14:20","date_gmt":"2021-07-31T12:14:20","guid":{"rendered":"https:\/\/congdongvimach.vn\/?p=401"},"modified":"2021-07-31T19:20:08","modified_gmt":"2021-07-31T12:20:08","slug":"electronics-and-semiconductor-industry-in-vietnam","status":"publish","type":"post","link":"https:\/\/congdongvimach.vn\/en_us\/2021\/07\/electronics-and-semiconductor-industry-in-vietnam\/","title":{"rendered":"Electronics and Semiconductor Industry in Vietnam"},"content":{"rendered":"\n

As Vietnam\u2019s economy continues to grow and the country strives to move up the value chain, the government has promoted the electronics and semiconductor industry to help it achieve these goals. In this Q&A with\u00a0Filippo Bortoletti<\/a>, Senior Manager, Hanoi Office,\u00a0Dezan Shira & Associates<\/a>, we glean insights about the\u00a0electronics<\/a>\u00a0and semiconductor industries including a general overview as well as how local value chains are structured and locations of manufacturing hubs.<\/p>\n\n\n\n

Can you give us a brief overview of the electronics industry in Vietnam?<\/strong><\/p>\n\n\n\n

Vietnam\u2019s electronic industry has grown significantly and ranks as a key electronic exporter from 47 in 2001 to 12 in 2019 worldwide. It is now a global hotspot in electronics production.<\/p>\n\n\n\n

Smartphone exports ranked second worldwide, with a value of over US$50 billion in 2019. The main reasons for this were competitive labor costs and appealing policy incentives compared to other regional countries. Such conditions along with Vietnam\u2019s favorable demographics have fostered the growth of the electronics and semiconductor industry in Vietnam.<\/p>\n\n\n\n

Early investments were made by Samsung and Intel in Southern Vietnam. This was followed by investments in the North of the country such as Bac Ninh and Thai Nguyen provinces with investments made by other investors such as LG, Canon, and Panasonic.<\/p>\n\n\n\n

Telecommunications dominate the electronic industry followed by subassemblies. Telephones account for 50 percent of all electronics-related exports. Other important groups include computers, storage devices, and consumer electronics.<\/p>\n\n\n\n

The electronics component group is dominated by Intel which produces chips at their facility in Ho Chi Minh City since 2010.<\/p>\n\n\n\n

What about the semiconductor industry?<\/strong><\/p>\n\n\n\n

Vietnam\u2019s semiconductor industry is expected to reach US$6 billion by 2021 but still lags behind other Southeast Asian countries due to limited integrated circuit (IC) fabrication supply. While IC fabrication is still in its infancy, the design side is well developed with around 20 companies offering product design services.<\/p>\n\n\n\n

Businesses investing in the semiconductor industry are eligible for preferential incentives such as zero percent corporate income tax for the first four years, followed by 5 percent in the next nine years, and 10 percent in the next 15 years as opposed to the standard rate of 20 percent. In addition, industrial parks will fund 10 to 15 percent of training costs for companies in the semiconductor industry.<\/p>\n\n\n\n

The industry is dominated by foreign players. Intel leads, but others are Juki, Renesas, Esilicon among others. Local players include Saigon Semiconductor Technology, Viet Vmicro Electronics, and VSMC among others.<\/p>\n\n\n\n

Can you describe the local value chain?<\/strong><\/p>\n\n\n\n

In Vietnam upstream activities are weak. Design is carried out overseas and main components \u2013 such as electronic chips \u2013 are imported from other countries. Only a handful of companies conduct R&D activities within Vietnam. Mid-stream is the only area where Vietnam has advantages and the industry is developing. Indeed, local companies focus on assembly on finished products and subassemblies for export, with the lowest value add in the value chain. Downstream activities are done outside of Vietnam due to local companies\u2019 lack of marketing capabilities and capital.<\/p>\n\n\n\n

On the other hand, Vietnam has made significant efforts to welcome trade and expand on its free trade network. Several electronic products will be tax exempted in some of the FTAs that Vietnam has signed and implemented in recent years. This will result in the market growth of Vietnam\u2019s electronics exporting destination countries and expansion of telephone and computer components, computers, and electronic components industry.<\/p>\n\n\n\n

However, Vietnam will have to integrate into the value chain and move from just being a low-cost manufacture to reap benefits.<\/p>\n\n\n\n

In regard to the competitive landscape, companies in Vietnam can be divided into three groups: global lead firms, contract manufacturers, and platform leaders.<\/p>\n\n\n\n

Global lead firms are those that coordinate with global value chains and retain most of the added value and profits. Examples include multinationals such as Samsung, LG, Canon, and Panasonic.<\/p>\n\n\n\n

Contract manufacturers include key players focused on manufacturing for a range of lead firms worldwide. Examples include Foxconn, Jabil, and Compal.<\/p>\n\n\n\n

Platform leaders are companies with leading technologies (software, hardware, or both) that are widely used by other companies. The main player in this area is Intel.<\/p>\n\n\n\n

There are also a variety of companies that are part of the local supply chain that supply parts and subcomponents to the three groups. Among these are hundreds of foreign-invested firms mainly from South Korea and Japan.<\/p>\n\n\n\n

Are these companies located in specific areas?<\/strong><\/p>\n\n\n\n

In Vietnam, such companies are clustered in the Northern area, where the preferred location is in Hanoi and Hai Phong.<\/p>\n\n\n\n

What does the future of the industry look like in Vietnam?<\/strong><\/p>\n\n\n\n

I\u2019d like to point out that until 2007, Vietnam was not producing anything significant and now is one of the top electronic exporters worldwide. The industry is driven by few significantly big multinational companies with Samsung being the most prominent and is heavily reliant on imported components as local production is limited.<\/p>\n\n\n\n

However, continuous foreign investment and the adoption of Industry 4.0 technology are increasing the opportunities for hi-tech production in the short to medium term. Therefore, this is a good time for entrepreneurs to seriously consider Vietnam as their next destination for their investments in this industry.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Source: Vietnam Briefing<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

As Vietnam\u2019s economy continues to grow and the country strives to move up the value chain, the government has promoted the electronics and semiconductor industry to help it achieve these goals. In this Q&A with\u00a0Filippo Bortoletti, Senior Manager, Hanoi Office,\u00a0Dezan Shira & Associates, we glean insights about the\u00a0electronics\u00a0and semiconductor industries including a general overview as… Read More »Electronics and Semiconductor Industry in Vietnam<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","_ti_tpc_template_sync":false,"_ti_tpc_template_id":"","spay_email":""},"categories":[21],"tags":[],"yoast_head":"\nElectronics and Semiconductor Industry in Vietnam - C\u1ed9ng \u0110\u1ed3ng Vi M\u1ea1ch Vi\u1ec7t Nam<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/congdongvimach.vn\/en_us\/2021\/07\/electronics-and-semiconductor-industry-in-vietnam\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Electronics and Semiconductor Industry in Vietnam - C\u1ed9ng \u0110\u1ed3ng Vi M\u1ea1ch Vi\u1ec7t Nam\" \/>\n<meta property=\"og:description\" content=\"As Vietnam\u2019s economy continues to grow and the country strives to move up the value chain, the government has promoted the electronics and semiconductor industry to help it achieve these goals. 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