Electronics industry overcomes challenges to penetrate deep into global supply chain

Mrs. Do Thi Thuy Huong

Could you give an overview of the production and export situation of the electronics industry and its contribution to the export of the manufacturing and processing industry?

Vietnam's electronics industry is affirming its increasingly high position in the global supply chain. The role of Vietnamese electronics enterprises is now becoming an indispensable part of the global electronics supply chain. This is a very encouraging signal, especially in the context of the Vietnam Semiconductor Industry Development Strategy to 2030, with a vision to 2050, which was issued by the Prime Minister under Decision No. 1018/QD-TTg dated September 21, 2024. In this strategy, the electronics industry plays a central role.

Currently, domestic electronics enterprises are still mainly processing. So, in your opinion, what are the challenges in increasing the added value of products, and what solutions does the association have to support enterprises?

Yes, Vietnamese electronics businesses, like many businesses in the supporting industry, are mostly small and medium-sized enterprises. At this scale, businesses often lack three important factors: capital, technology and human resources.

First of all, businesses face difficulties in capital, not being able to expand production, invest in machinery, equipment and modern technology to improve product quality, and meet higher requirements in the supply chain. Next is the issue of human resources, especially human resources for management and production line operations. Although Vietnam has many people capable of taking on these roles, some businesses still have to hire foreign experts. This shows a shortage in training high-quality human resources.

In addition, many businesses still face difficulties in accessing support programs from the Government and international organizations to improve capacity and digital transformation. These support programs need to be in-depth, focusing on training specialized human resources and supporting businesses to increase added value.

Businesses themselves also need to access information sources on support from capacity building to digital transformation training to improve productivity and product added value.

Regarding international market expansion, can you share about the relationship between domestic electronics businesses and the overseas trading system?

We see that in terms of information, the opportunities from the international market are currently abundant. However, the capacity of domestic enterprises is still not enough to fully meet the requirements of the international market. When there are opportunities and new orders from abroad, many enterprises are not ready to receive them. Although some enterprises affirm that they have the ability to produce, when the requirements are large quantities, ensuring progress and consistent quality, enterprises still face difficulties.

This clearly shows that businesses need to make efforts to improve their capacity to be ready to seize export opportunities to international markets.

Faced with the wave of production and investment shifts by Chinese and foreign enterprises to Vietnam, how do you assess the advantages and challenges for Vietnamese enterprises?

China is currently the second largest export market for Vietnam's electronics industry, after the United States, and is also the largest source of raw materials and components for Vietnam's electronics industry, accounting for 80%. Therefore, the Chinese market plays an extremely important role for Vietnamese electronics enterprises.

The wave of production and investment shifts by Chinese enterprises and other foreign companies to Vietnam has both advantages and challenges. The challenge is that competition in the domestic market will become increasingly fierce. However, this is also an opportunity for Vietnamese enterprises to cooperate, form joint ventures and improve their technology and corporate governance, as well as access investment capital through joint ventures.

In your opinion, how should policies be improved to support the development of the electronics industry in particular and key industries in general?

Currently, the supporting industry is regulated in Decree 111/2015/ND-CP, which provides support and incentive policies for the development of supporting industries. However, there is a need for more comprehensive and comprehensive policies to help the supporting industry in the supply chain take off. We also know that there is a draft Law on Key Industries, in which supporting industries are an important part. We hope that the law will be issued soon to create a solid foundation for the supporting industry, especially in the electronics sector.

In addition, businesses need support to access capital flexibly and conveniently. Lack of capital is a major barrier to expanding production and investing in technology. Tax and customs policies also need to be stable to create peace of mind for businesses. Avoid sudden changes in policy to ensure a transparent and predictable business environment.