Domestic sector expected to foster phone, component export resurgence
Domestic sector expected to foster phone, component export resurgence
Phones and components continue to top the list of Vietnamese exports despite Covid-19-induced difficulties.
Top exports
According to the Ministry of Industry and Trade, in the first two months of 2021, the export value of nine groups of products exceeded US$1 billion each, accounting for 73.8 percent of Vietnam’s total export value. Of these, the export value of phones and components reached US$9.3 billion, accounting for 19.2 percent of the total, a year-on-year increase of 22.8 percent.
Computers, electronic and optical products also significantly contributed to export growth. In the first two months of 2021, the production index of these products grew 21.2 percent compared with the same period last year. The manufacturing of communication devices, mostly phones and components, grew 22.9 percent. Specifically, 35 million mobile phones were manufactured, up 1.2 percent; phone component production reached VND95.4 trillion, up 55.7 percent. Major export markets of these products include the EU, the US, and China. Exports to China in the first two months of this year reached nearly US$2.5 billion, a year-on-year increase of 103.9 percent.
In 2010, phones and components accounted for 3.2 percent of Vietnam’s total export value. This increased six-fold to 19.5 percent in 2016 and has been maintained around 20 percent since then. In the first two months of 2021, these products topped the list of Vietnam’s exports to the United Arab Emirates (UAE), with value reaching US$551 million, a year-on-year increase of nearly 108 percent, accounting for two thirds of total export value.
Mobile phone manufacturing at VinSmart
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Opening way for domestic firms?
Foreign investment in Vietnam in manufacturing phones and components has been increasing. While Apple’s major suppliers such as Foxcon, Luxshare, GoerTek, and Compal already have factories in Vietnam, the mobile giant keeps encouraging its suppliers to shift manufacturing from China.
The export value of Samsung’s phones and components grew sharply in the first two months of 2021. By the end of 2020, about 50 Vietnamese companies had become Samsung’s tier-1 suppliers. However, foreign firms keep importing input components for phone manufacturing in Vietnam.
In the first two months of this year, Vietnam imported US$3.64 billion worth of phones and components, a year-on-year increase of 74.6 percent. Domestic companies are expected to contribute to a resurgence in phone and component exports.
Do Thi Thuy Huong, member of the Executive Board of the Vietnam Electronic Industries Association, said that in the post-Covid-19 period, additional electronics companies with foreign direct investment (FDI) will move their manufacturing facilities to Vietnam, creating opportunities for Vietnamese businesses to supply them with components and accessories. “We want FDI projects in the electronics sector to create breakthroughs for Vietnamese companies to create domestic value added in exports to benefit Vietnamese consumers,” she said.
In February 2021, VinSmart, a member of Vingroup, launched three made-in-Vietnam smart phone models on the website of the leading US conglomerate AT&T. This development has encouraged Vietnamese companies to invest in manufacturing phones and components for export and boosted their confidence in their global competitiveness. Nguyen Thi Hong, General Director of the Mobile Division of the VinSmart Research and Manufacture Joint Stock Company, said that in 2021, VinSmart will concentrate on creating high-quality products for sale to the US market.
| Economists forecast global consumption of mobile phones will grow well in 2021 and until 2024. |
