Vietnam's Electronics Supply Chain: From assembly hub to innovation powerhouse

By Mrs. Do Thi Thuy Huong
Executive Board Director, Vietnam Electronic Industries Association (VEIA)

Over the past two decades, Vietnam has emerged as a significant force in global electronics manufacturing. With favourable labour costs, strategic geographic positioning, and robust government support, the country has attracted global giants such as Samsung, LG, Intel, and Foxconn. These corporations have built major production facilities across provinces like Bac Ninh, Bac Giang, and Ho Chi Minh City, integrating Vietnam deeply into the global electronics supply chain. However, as global competition intensifies and the electronics market evolves, Vietnam must transition from being an assembly hub to becoming an innovation-driven economy. This shift depends heavily on the integration of advanced technology and automation throughout its manufacturing landscape​.

Automation technologies, including robotics, machine vision, and intelligent production systems, are rapidly transforming Vietnam’s production lines. These innovations not only reduce the dependency on manual labour but also enhance accuracy and productivity. In the manufacturing of printed circuit boards and camera modules, for example, automated lines have significantly shortened production times while maintaining high quality standards. As a reflection of this momentum, the Vietnam Smart Manufacturing Market is projected to grow at a compound annual growth rate of 11.2% between 2024 and 2032, signalling a strong commitment to digital transformation across the sector​.

Government initiatives have played a crucial role in this progress. The National Digital Transformation Program, launched in 2020, has accelerated the development of digital infrastructure and industrial digitisation, leading to the rise of innovation hubs like Hoa Lac High-Tech Park and Saigon High-Tech Park. These centers attract both foreign and domestic investments, supporting the development of more sophisticated manufacturing capabilities. Companies like Samsung have established research and development centers in Hanoi and Ho Chi Minh City, while Intel has invested over $1 billion in semiconductor assembly and testing. Vietnamese companies such as FPT Semiconductor and Viettel High-Tech are also increasing their investment in research and development to reduce reliance on imported technologies​.

Despite these advances, the sector continues to face several structural challenges. Vietnam remains heavily dependent on imported components and high-tech machinery, with nearly 99 percent of its electronic hardware sourced from abroad. This dependency exposes the industry to global supply chain disruptions and limits the benefits of automation. Moreover, while Vietnam’s workforce is young and dynamic, many workers lack the technical training necessary for operating automated systems. Education and upskilling remain critical to preparing the next generation of technicians and engineers. Small and medium-sized enterprises, which constitute a large part of the domestic manufacturing landscape, often face financial constraints that limit their ability to adopt cutting-edge technologies. At the same time, regional competitors like Thailand, Malaysia, and India are rapidly advancing their own electronics sectors, posing a competitive challenge to Vietnam’s long-term growth​.

Looking ahead, Vietnam’s pathway to becoming a global innovation hub lies in fostering local research and development, investing in workforce development, strengthening domestic supply chain ecosystems, and leveraging international partnerships. Programs that encourage public-private collaboration, technology transfer, and industrial training will be crucial in building a resilient, high-value manufacturing sector. Vietnam’s active participation in free trade agreements, such as the CPTPP and EVFTA, and recent partnerships with countries like the United States in semiconductor supply chains further enhance its potential to emerge as a technology leader​.

Vietnam stands at a pivotal moment in its industrial journey. With the continued support of government, industry stakeholders, and associations like VEIA, the country is poised to transform from a follower into a leader in global electronics. By embracing innovation, nurturing talent, and expanding its technological capabilities, Vietnam can secure a stronger, smarter, and more sustainable future in the international manufacturing arena.

Edited by: Ringier Events