According to Vietnamese media reports, Vietnam's electronics industry is showing an explosive development trend, playing a crucial role in driving the country's trade development and GDP growth in the past decade.
An unnamed representative of the Vietnam Electronic Commerce Association quoted by dangcongsan.vn, the online news portal of the Communist Party of Vietnam, commented on the opportunities in Vietnam's electronics sector, stating that since the beginning of 2023, many giant companies in the electronics industry have shifted from foreign markets to Vietnam, seeking manufacturing factories and implementing supply chains.
For the past 10 years, the total export value of Vietnam's electronics industry has consistently ranked first in the country’s processing and manufacturing sector. In 2022, the total export value exceeded $114 billion, accounting for more than 30% of Vietnam's total export value. This data shows that the electronics industry plays a significant role in the national foreign exchange and trade balance. In 2022, Vietnam's trade surplus was $11.2 billion. Meanwhile, the electronics industry’s trade surplus was as high as $11.246 billion.
China, the US, and South Korea are the largest export markets for Vietnam's electronics industry. The main electronic products exported are mobile phones, televisions, cameras, and electronic integrated circuits.
The Vietnamese electronics industry is highly attractive to foreign companies, especially multinational corporations. In recent years, a number of major electronics companies have shifted a portion of their supply chain to Vietnam. LG has transferred all its smartphone production lines from South Korea to Haiphong City, for example. Apple will transfer production lines for AirPods and Nintendo to Vietnam. In addition, Apple's main supplier, Foxconn, was allowed to invest in two factories in Vietnam earlier this year, with a total value of $246 million.
Thanks to free trade agreements, tax cuts for businesses, improvements in labor quality, and administrative reforms, Vietnam continues to attract foreign investors who use Asia as a destination for electronics investment.
Investment opportunities
One is the preferential policies from various free trade agreements. Companies that want to settle in Vietnam can utilize the free trade agreement network. As a member of ASEAN, Vietnam has participated in multiple free trade agreements.
The second is tariff preferential policies, where investors not only benefit from tax reduction, but also from the corporate income tax preferential policies adopted by the Vietnamese government for enterprises investing in high-tech fields, high-tech industrial zones, designated industrial zones, and economically and socially underdeveloped areas.
The third is reform work, with electronics, information, and telecommunications being included in one of the top 10 priority industries in the Vietnamese government's approved Industrial Development Strategy (2025-2035 phase). Foreign investors are encouraged to invest and develop in electronics industry clusters and designated industrial zones with necessary infrastructure and material facilities. Enterprises invested here will receive a reduction in corporate income tax.
The fourth is a smooth population structure. According to research by the United Nations Population Fund (UNFPA), the "golden" population era in Vietnam will be from 2010 to 2040, when the number of working age demographics in Vietnam will exceed that of the elderly population. In addition, Vietnam's minimum wage in different regions ranges from $140 to $202. Compared to other production centers in the region, this wage level is lower.
In terms of labor quality, compared to other countries in the region, Vietnamese engineers in the electronics field have a relatively high professional level. According to a representative from Samsung (Vietnam), 10% of Samsung's global software is developed by Vietnamese information technology engineers. Samsung's two largest research and development centers are located in Hanoi and Ho Chi Minh City.
In recent years, with the rapid growth of electronics manufacturing, trade, and investment, utilizing Vietnam as a low-cost or formal production center for operations in Asia has become a top choice.
Source: Yuetong Society
