HANOI: Vietnamese electronics businesses participate in the supply chain but with unstable order positions that are low and small in the chain, and with too few opportunities.
That was the remark made by Do Thi Thuy Huong, a member of the executive committee of the Vietnam Electronics Business Association, at a roundtable discussion within the framework of the 2024 Summer Economic Forum.
In the first five months of 2024, Vietnam’s electronic exports reached 31.61%, equivalent to US$49bil. The industry had a trade surplus of more than US$5bil.
“These are telling numbers that show the huge role of the electronics industry plays,” said Huong. “The industry also exports to large markets with consumer capacity.
“The electronics industry is in a valuable export position globally, ranking second in mobile phone exports and fifth in computer and component exports.”
However, due to weak global demand, the last months of 2023 and especially the first five months of 2024, the industry faced many difficulties.
According to Huong, the main products of exported electronics are consumer goods, and many Vietnamese electronics enterprises had to cut labour by up to 70%, forcing them to lay off long-time and skilled workers.
“Many businesses have tried to find new orders, but the value of new orders is not equal to the old orders. Along with that comes uncertainty and instability.”
He added that businesses are being squeezed for orders, with the “foreign direct investment (FDI) enterprises always given priority”.
“This is a disadvantage for Vietnamese businesses,” said Huong.
“Local businesses participate in the supply chain with precarious and unstable order positions.”
Huong said that the electronics industry included mainly small and medium-sized enterprises, lacking skilled labour and capital and advanced technologies.
They also had many difficulties in accessing loans and grants.
Also at the event, the deputy regional managing director of the US-Asean Business Council, Vu Tu Thanh, said that although Vietnamese electronics businesses had a lower position than FDI enterprises, they still had the opportunity to make strategic products such as light drones (close-range drones) and security cameras.
He said there weren’t many countries that can produce these products, other than China.
The global close-range drone market in 2023 was worth US$63bil, of which China accounted for 80%.
“We know that 80% in the future will not be exported to the United States or other countries that feel it is a sensitive product and needs control.
“That would then become an opportunity for Vietnamese engineers and businesses to fully design and produce them,” said Thanh. — Viet Nam News/ANN
