Samsung Vietnam trims export target by US$5.8 billion on Covid-19
Domestic electronic production could be among industrial sectors that face major challenges in the coming quarters as major export markets are struggling with the pandemic.
Samsung Vietnam expected its export turnover in 2020 to reach US$45.5 billion, down US$5.8 billion against the firm’s export revenue last year, due to the growing impacts of the Covid-19 pandemic on the global electronic industry.
The information was revealed in a report of the Ministry of Industry and Trade (MoIT) sent to Prime Minister Nguyen Xuan Phuc, local media reported.
The report suggested the domestic electronic production could be among industrial sectors that face major challenges in the coming quarters, as the pandemic may lead to a decline in demand for electronic products in the US and European markets.
At present, the US and Europe make up 17% and 24% of Vietnam’s shipments of phones and parts, respectively, while the respective rates for electronic and accessories are 17% and 14%.
Additionally, the US and Europe are importing over 50% of products of Samsung Electronics Vietnam, of which the US market accounts for 20% and Europe 30%.
Strategy Analytics Inc., a market research firm, forecast global revenue from smartphone sales in 2020 could decline by 10% as the Covid-19 pandemic is spreading in the US and Europe, in turn severely affecting Vietnam’s electronic industry.
The Vietnam Electronic Industries Association (VEIA) expected a plunge in the number of long-term contracts and orders for local electronic manufacturers.
According to the MoIT, local companies faced a shortage of input materials for production since the Covid-19 outbreak. Recently, imports of materials from China have partially recovered, but the customs clearance process remains slow due to anti-virus measures.
Firms are struggling to find alternative sources other than China, especially in terms of price and quick delivery, stated the MoIT.