In 2012, country's retail demand for consumer electronics products grew robustly, despite pressure on consumer incomes from rising inflation. Growth areas include smartphones, where a surge in demand has been fuelled by lower prices, and flat screen TV sets, which now comprise more than two-thirds of TV set sales. Computer hardware sales were US$ 1.8 billion in 2012 and are expected to reach US$ 2.1 billion by the end of 2013. Audio Visual Sales were US$ 1.4 billion in 2012 and is expected to reach US$ 1.6 billion by the end of 2013 with flat-screen TV sets expected to provide the most dynamic development. Handset sales were US$ 2.0 billion in 2012 and are expected to reach US$2.5 billion by the end of 2013, with Android smartphones and low-cost feature phones the main revenue growth driver.

 

In recent three years, Vietnam's export turnover of computers, electronic products and components have been always recording year-on-year good growth, from US$2.76 billion in 2009 to US$4.46 billion in 2011, growing over 30% from 2010. In the first seven months of 2012, the country's export turnover for these products reaped US$ 4.03 billion, rising 83.6% in value from the same period last year.

 

Low wages and favorable investment incentives have made Vietnam's electronics manufacturing sector a highly attractive target for multinational corporations to set up or expand factories. With Singapore and its formerly strong electronics industry at the brink of recession and Thailand's minimum wage policy deterring investors, Vietnam has become a solid alternative for global electronics goods makers who are increasingly relocating manufacturing outlets to Vietnam, such as Intel, Samsung and Jabil Circuits.  

 

Jabil Circuit, an electronic parts manufacturer, has plans to double the investment for its card payment machine and network router factory in Ho Chi Minh City to US$ 100 million. Samsung is also pouring US$700 million into a new mobile phone factory in the north of Vietnam. Japanese Nidec Corp, the world's biggest manufacturer of motors for hard disk drives, and has revealed that it would set up the seventh factory in Ho Chi Minh City. Semiconductor giant Intel, who opened an assembly and testing plant in Ho Chi Minh City in 2010 that is the largest such facility for the company worldwide, said it is looking to increase the complexity of work that is being done in Vietnam and invest into more high-tech facilities.

 

Vietnam's electronics industry is nascent and characterized by import dependence and the existence of foreign firms in the market. These firms account for significant proportions of trade.  Experts believe that a favorable demographic structure is enabling the growth of the electronics industry. The Government's vision for 2020 targets the development of the electronics industry by setting up IT parks, an electronics association, and developing human capital. Semiconductors are witnessing a surge in demand and production is likely to be underway with the construction of front-end fabrication units in Vietnam. Demand for consumer electronics such as mobile handsets, audio-video, and gaming devices are also expected to witness a boost. A conducive policy on environment, burgeoning electronics demand, and immense potential for manufacturing of semiconductors, circuits, and consumer durable are likely to pave the way for a well-developed electronics industry in Vietnam.

 

(Source: Insight Alpha)