Vietnam’s Booming Electronics Exports: Handsets, Chips and More

Electronics exports from virtually all Southeast Asian countries soared in recent years, but absolutely skyrocketed in Vietnam, where they grew from $4.2 billion in 2009 to $38.4 billion in 2013. Vietnam is the world’s 12th-largest exporter of electronics and electrical equipment today, up from 36th place just five years earlier. Although the country remains a major producer of garments, footwear and other basic goods, electronics are now its top export.

VN Electronics Export
Much of this growth was driven by investments from handset manufacturers like Samsung, which poured billions into new production and assembly factories over the past few years. Vietnam exported roughly $22.8 billion in handsets and phone parts in 2013, up from just $600 million in 2009. Handsets and phone parts now account for 59.4% of total electronics exports in the country. 

VN Electronics sub sector
Since 2009, Vietnam also emerged as a major exporter of integrated circuits (ICs). Five years ago, the country shipped only $200 million in ICs, but ever since Intel built a $1 billion assembling and testing plant for chips in Ho Chi Minh City in 2010, IC manufacturing soared almost as quickly as handset and phone parts production. By 2013, Vietnam exported $4.8 billion in ICs, accounting for 12.4% of total electronics exports. 

Vietnam’s emergence as a major global producer and exporter of electronics happened mostly in the past five years. Although the country attracted a trickle of foreign investments in the mid-1990s and early-2000s, the first wave of major investments from electronics manufacturers occurred in the mid-2000s. As shown in the timeline below, investments continued to snowball ever since. 

Timeline of Electronics Investments in Vietnam

Mid-1990s – First wave of foreign investment (mostly small factories in Ho Chi Minh City; mainly producing household appliances)

Early-2000s – Second wave of foreign investment (more small factories, this time many in the north; more household appliances, as well as components and some office equipment)

2006-7 – First wave of major investments (Canon, Jabil, Foxconn, Compal and Fujitsu all commit over $100 million; Intel commits $1 billion to an assembly and test facility that was completed in 2010)

2008 – Investment increases dramatically again as Samsung commits $670 million for mobile phone assembly and components production plant; Bosch and Canon also come in with major commitments

2010 – Intel opens its $1 billion assembly and testing plant

2011-2 – More major investments from Nokia, Panasonic and Fuji Xerox

2013 – Biggest year yet for investment expansion; LG commits $1.5 billion; Samsung commits $3.2 billion to Thai Nguyen complex, which does both components and assembly

2014 – Two more big investments from Samsung for display production/assembly: $1 billion in display factory in north, including R&D related to manufacturing, and $1 billion in Ho Chi Minh City.