Electronics industry falls behind

The consumer electronics industry has achieved a stable annual growth rate of 20-25 per cent in recent years but still failed to produce made-in-Viet Nam products for the local market at a rate comparable with the other countries in the region, says the general secretary of the Viet Nam Electronics Industries Association Tran Quang Hung.

The electronics industry was being dragged down by two typical limitations, fast-growing but unsustainable infrastructure and a reliance on foreign software, Hung said, adding that the software lacked leadership in such fields as system setup and programming.

Meanwhile, the growing demand for consumer electronics, and preferential policies towards foreign investors had made the Vietnamese market ripe for the picking by foreign electronics giants like Japan’s Toshiba and JVC, or South Korea’s Samsung and LG, he said.

These foreign giants dominate exports in the consumer electronics sector, accounting for over 80 per cent of last year’s export turnover of US$2.7 billion worth of electronics products.

The number of domestic enterprises with the capacity to compete was tiny, effectively knocking Vietnames enterprises out of the domestic market, said Hung.

He noted, for instance, that the number of domestically-owned television assembly plants nationwide had fallen from around 100 in the 1990s to just five currently. Those that remain typically import components from China and then merely assemble them here, employing foreign engineers and designers. Domestic added value in these products is minimal.

Vietnamese businesses needed to join a global value chain, Hung said, and the electronics industry needed to identify production phases or products to which they could add the highest value, Hung said.

He added they also needed to focus on intensive investments and creating the most strongly competitive products, as well as the development of designers and support industries capable of producing local content.

While other Southeast Asian countries had put a top priority on the consumer electronics industry, the Government had neglected the support policies and regulations that would be an important factor in the sustainable development of this industry, he said, urging authorities to support more students to study electronics engineering and design.

Hung also said that the consumer electronics industry needed to find ways to attract foreign investment to counteract the financial strength of foreign competitors in the field.

Their investment in Viet Nam was to meet their own trade targets, not to help Viet Nam develop its own electronics industry, he said. — VNS

Tags: Vietnam Electronics Industry