Links between domestic, foreign electronics makers short circuit

12:20 | 09/12/2018 Industry

(VEN) - The Vietnamese electronics support industries are still underdeveloped. Experts believe that unless these firms cooperate with foreign-invested companies, they will be unable to compete with foreign rivals and remain parts suppliers.

links between domestic foreign electronics makers short circuit

Electronics giants

Most of the world’s electronics giants, such as Samsung, LG, Canon, Intel and Panasonic, operate in Vietnam. Ministry of Industry and Trade data show 661 domestically owned support industry companies registered in Vietnam, but only a few are able to supply products for major foreign electronics companies. Most electronic products in the domestic market are imported as fully assembled units or assembled in Vietnam using imported components. According to Chu Thi Chi Binh, Secretary General of the Vietnam Association for Supporting Industries, most Vietnamese support industry companies are unable to supply major components of high added value, and can only participate in simple stages of production, such as packaging, user guides, plastic details or paint.

Most Vietnamese electronics support industry companies are small to medium in size. They lack capital, technology and high-quality human resources, all disadvantages in accessing the supply chains of major groups. Moreover, the linkage among domestic companies remains loose. They have to import or purchase from foreign companies most kinds of materials and components.

Tightening linkages

To promote their sustainable development, according to Chu Thi Chi Binh, domestic companies need to increase their capital and invest in technology, as well as to tighten their linkages with foreign businesses. In fact, most foreign companies want to cooperate with local suppliers to reduce expenses.

According to Suttisak Wilanan, Deputy Managing Director of the Reed Tradex Co., Ltd., many foreign companies are creating opportunities for Vietnamese businesses to access supply chains in the electronics industry, through capacity, business efficiency and competitiveness enhancement programs.

Samsung Vietnam, for example, has coordinated with the Ministry of Industry and Trade to organize support industry exhibitions and workshops to seek local suppliers. Samsung also sent experts from the Republic of Korea to Vietnam to help Vietnamese companies improve product quality. Currently, Samsung is coordinating with the Ministry of Industry and Trade to provide a two-year training program for 200 Vietnamese consultants. These consultants will assist Vietnamese companies in improving manufacturing capacity so that they can seek opportunities to join global supply chains.

Nguyen Nam Hai, Deputy Director of the Directorate for Standards, Metrology and Quality, believes technology is the key to domestic electronics companies’ participation in global supply chains. Moreover, in his opinion, they need to ensure stable product quality and reasonable prices.

Hai Linh