Support industry needs policy support

Hung told a recent conference on developing the electronic industry that the ministry is prepared to actively connect domestic firms with multinational companies so that they can take advantage of bigger supply chains.

The ministry plans to promote Vietnamese electronics on its website and open three centres promoting the electronics industry.

He asked firms to diversify their products and pursue co-operation with experienced and technology-savvy foreign investors to improve production of spare parts and accessories.

With nearly 500 companies, Vietnam's electronics industry has seen steady growth in export sales, pocketing US$6.9 billion in 2011, US$20.5 billion in 2012 and US$32.1 billion last year. Exports of mobile phones and mobile components accounted for 67% of electronic export revenues last year.

The Chairman of the Vietnam Electronics Industries Association, Luu Hoang Long, said that despite increases in exports, the country's electronics industry is struggling to develop value-adding production and is only a modest contributor to national GDP.

Long said foreign direct investment (FDI) companies account for only a third of electronics companies in Vietnam. He added that FDI firms possess newer technologies, a domestic market share of more than 80% and contribute more than 90% to electronics export turnover.

Few Vietnamese firms in support industries were able to supply inputs to FDI companies, hampered by a lack of experience, capital, technology and marketing.

"Most domestic firms are specialised in processing and assembling," Long said, citing that 80% of electronic products made in Vietnam were electrical appliances, including TVs, computers and telephones. Around 20% of products are made for specialised use.

"This has resulted in an imbalance in the categories of products," he said.

The General Director of Viettronic Tan Binh, Vu Duong Ngoc Duy, urged the Government to guide domestic companies towards better projects.

Policies are needed to attract foreign firms and encourage domestic companies to tap into the potential of support industries, said Duy. Additionally, any administrative support for firms must be transparent and accessible to firms in the market, he said