Development trends of Vietnam’s electronics technology market in 2024
Development trends of Vietnam’s electronics technology market in 2023
Vietnam’s electronics technology sector achieved significant strides in 2022, overcoming challenges brought on by the COVID-19 outbreak. The electronics sector’s revenue increased by 15% from 2021 to 120 billion USD.
However, it is clear that foreign companies’ presence is a major factor in the growth of Vietnam’s electronics technology business. The overall electronic technology market development trend that will be occurring in Vietnam in 2023 is described below.
1. Vietnam electronics technology market overview 2023
The electronics sector has both possibilities and problems in 2023 as the adoption of cutting-edge technologies like quantum computing, artificial intelligence, the metaverse, cryptocurrencies, robotics, and the internet of things accelerates. The 4.0 revolution is not an exception for Vietnam’s electronics technology sector, which confronts several difficulties in areas including supply chains, cybersecurity, legislative restrictions, and global rivalry. Up to 99% of the electronic and telecommunications technology equipment in use in the hardware sector is imported from other countries.
The Ministry of Information and Communications’ deputy director general, Mr. Nguyen Thien Nghia, claims that although the electronics technology industry in Vietnam has seen a significant increase in revenue, the majority of the contribution comes from foreign businesses.
1.1. Revenue of Electronic Technology industry in Vietnam
Approximately 17.8% of the global electronics technology market belongs to the Vietnamese market, mostly manufacturing electronic goods such as computers and optical items. Smartphones and electronic components in which are the primary final offerings of this sector, according to the General Statistics Office of Vietnam.
Especially in the period of 2016-2020, Vietnam’s electronics market has the most valuable development. It can be clearly seen that foreign direct investment projects in the electronics sector are increasing at an extremely fast pace. The peak of this era takes place in 2017, as numerous significant electronics manufacturers from across the world, including Samsung, LG, and Foxconn, invested in the construction of high-tech electronic product manufacturing facilities in Vietnam. Whereas the index of production rose by 13.94% on average in this period, 2017 witnessed a recognition that 35.7% of Vietnam’s industrial market share was accounted for by the electronics technology sector. This is an extremely remarkable figure!
Vietnam has made a significant contribution to the electronics export market during the past five years, helping to raise average growth rates of up to 13% annually and standard salaries for domestic employees.
The electronics and telecommunications technology sector in Vietnam, nevertheless, also faces significant difficulties and limitations. The over-reliance on foreign direct investment (FDI) is one of the main issues. The statistics show that by the end of June 2022, the percentage of “made in Vietnam” volume in the ICT sector’s revenue structure would be at only 26.72%, with an anticipated value of around 19.4 billion USD out of an overall industry total of more than 72.5 billion USD. This demonstrates how domestic businesses lack originality and drive. The majority of Vietnamese businesses exclusively work with overseas investors to process, assemble, and deliver parts.
1.2. Revenue of consumer electronics market in Vietnam
Statistics from Vietnam’s Ministry of Industry and Trade’s Market Department show that the domestic market for home products is now valued at between 12.5 and 13 billion USD, and that demand will continue to rise until the year 2025.
The market revenue of electronic technology equipment and home appliances in Vietnam reached 6.8 billion USD in 2020, up 6% from 2019, claims a report by market research company Euromonitor International. This is the second-highest growth rate in Asia after China, and it is the highest in Southeast Asia.
Kitchen-related items including microwaves, electric stoves, rice cookers, and blenders make up the greatest percentage of electronic technology equipment and home appliances, accounting for roughly half of the market’s revenue. With roughly 25%, laundry-related devices including washing machines, dryers, irons, etc. came in second. In addition, the market for cooling and heating products, including fans, heaters, and air conditioners, placed third with roughly 20%. About 15% of the remaining goods include dishwashers, vacuum cleaners, and air purifiers.
The market revenue for electrical and electronic technology components in Vietnam will increase significantly over the next several years, reaching 8.7 billion USD by 2025, according to predictions made by Euromonitor International. The main trends affecting the Vietnamese market in the future include: the introduction of smart products and internet connectivity (IoT), the development of domestic and regional brands, the shift of consumers from low-cost products to high-end and high-quality products.
2. Opportunities and challenges of the electronic technology industry in 2023
The electronics industry is one of the fastest growing industries and has a great influence on many other sectors of society. In 2023, the sector will continue to receive many opportunities and face many new challenges. The following are some opportunities as well as challenges for the electronic technology industry in general and the production of electronic technology components and household appliances in particular.
2.1 Opportunities
The Ministry of Information and Communications issued Circular 25/2022/TT-BTTTT at the end of 2022, which lists imported supplies, parts, and equipment that are free from import duties when used in the direct manufacture of IT goods, digital content, and software. This is a crucial policy that will help to support and create favorable conditions for small technology electronics manufacturers in Vietnam to help address the shortcomings of the disparity between the lower import tax on finished products and the import tax on raw materials, supplies, and components…
The increasing number of applications for artificial intelligence and machine learning in numerous fields including industry, healthcare, education, security, and entertainment. Smart electronics-efficient and energy-efficient electronic technology components are necessary for the support of artificial intelligence and machine learning.
Therefore, the electronics industry will have the opportunity to develop new products and services to meet the needs of the market and customers.
2.2 Challenges
Vietnam’s electronics technology industry would yet confront several obstacles in 2023. The strong rivalry from overseas companies is one of the major obstacles. Afterward, a lack of highly skilled people resources is another issue facing the electronics sector. Vietnam’s electronics technology industry thus is one that values employees’ innovation, adaptability, and intensity.
Additionally, the company is under pressure to guarantee the timeliness and quality of deliveries and to adhere to the stringent standards of purchasers. Vietnam’s National Assembly and Government must establish policies that are stable, consistent, and have a long-term outlook in order to foster the growth of indigenous electronic technology firms.
To face the above challenges, NEPCON Vietnam 2024 could provide a timely solution to help electronic technology equipment manufacturers access modern solutions, suitable to company size to improve production efficiency, increase competitiveness and create resilience in 2023.
3. Industry movements that have been happening in 2023
Roh Tae-Moon, the general director of Samsung Electronics Group, has revealed that the company is setting up the Thai Nguyen facility to begin mass producing transistor chip mesh in July 2023 after conducting a trial run.
By the middle of 2023, Apple also intends to relocate a portion of MacBook manufacture to Vietnam, according to sources with Nikkei Asia. Amid heightened technical tensions between the US and China, this is a move to diversify Apple’s production base away from China.
The electronics technology field is predicted to continue expanding in Vietnam along with the globe starting in 2023, with an eye toward 2025. On an international scale, the transmission of technology more deeply is accelerating more quickly than ever. Take advantage of your prospects and join the electronic technology revolution.
