Energizing growth in Vietnam electronics industry

energizing growth in vietnam electronics industry hinh 0 Speaking at a recent business forum, Nguyen Chi Dung, minister of the MoPI, said the country has a lot to offer the global electronics industry, such as with top design engineers and world-class electronics manufacturing companies. We have the latent technological expertise and skills, said Minister Dung, but much more need be done to fully develop that talent and lay the proper foundation for entry into the competitive global electronics industry.

Historically, the nation's manufacturers have not produced electronic components in any large measure, which is a key segment of electronics manufacturing and the first stepping stone for the domestic industry.

Mr Dung said he recently met with representatives of Samsung to talk about the future of the country's component supply industry and its effect on the electronic contract manufacturing industry.

As a result, he said he believes advances are being made in the number of local vendors qualifying to participate in the supply chain, as Samsung has represented it has increased by three-fold over that of last year.

The biggest drawbacks are the tough competition, lack of adequate manufacturing facilities and basic deficient fundamental business management skills possessed by local companies in the industry, he underscored.

As a general rule, multinationals such as Samsung are more than willing to consider local companies for inclusion in their supply chains provided they can demonstrate their qualifications and ability to compete consistently on price, quality and timeliness.

Prof Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, in turn pointed out that most all multinational companies operating in the country have well established deep rooted quality supply chains.

Invariably these supply chains predate the multinationals entry into Vietnam and many were formed with suppliers in China and the Republic of Korea.

These companies cannot be expected to disrupt these long established mutually beneficial relationships and risk potentially upsetting their production schedules and losing millions of dollars in profits to take a gamble on untested local suppliers.

The Professor highlighted the fact that most local companies face critical shortages of funds to invest in the state-of-the-art technological plant and equipment needed to compete in the big league global supply chains.

Just as importantly, they lack having the sophisticated management systems and internal quality controls in place to manage the logistics of such contracts on a footing comparable to successful actors in the global supply chains.

Prof Mai said he agrees with Minister Dung who said that growth in the electronics manufacturing business mainly comes from innovative entrepreneurs who are designing and engineering their own products.

We may not have the world class manufacturing facilities that we can really be proud of yet but we do have design engineering talent that we can tap who possess the requisite skills to keep up with the latest technology, said the Professor.

Maybe the best idea is to find ways to bring together these design engineers with all other industry players related to electronics manufacturing in some way and collectively find a pathway into the industry.

Electronics is so fast-moving there are new products launched almost daily and it is important for us as a burgeoning supply industry to keep up to date and informed of these developments as they ultimately affect our future production.

By working collectively, he believes the nation can develop a full blown electronic export industry of note and create real jobs, but that is a long-term proposition that may take decades to realize before the country really showcases its ability to the global market.