Vietnam Electronic component Comprehensive Report Q3/2016
The electronic component industry is the supporting industry which is important to the development of the electronics.
World’s Total production value has surged since 2012 but seemed to slow down in 2014 and it was 578 billion USD in 2015. This is due to the USD rising along with the interest expectation while the American economy is slow down, which affect the industry development. Besides, the outputs industry - Electronic industry also slowed down due to the plummet of oil price since the second half of 2014.
The global electronics market has long been controlled by developed economies like America, Japan, and some EU countries. Following countries struggled in accessing and participating into the market. In order to do this, they have to pass multinational companies. In the last decade, India and China are named the global workshops; however, recently with the emergence of Vietnam, multinational companies are considering the plant movement to Vietnam due to low labor cost and investment and trade incentives.
In 2014, electronics industry production value was 403 thousand billion VND, accounting for 9.5% in value of the entire industry.
Vietnam’s electronic component industry is young and just operates in the outsourcing aspect through importing basic electronic parts and then assembling to specialized ones and then export. Hence the added value is low, only 5-10% mainly due to the advantage of low cost of labor.
Supporting industry and component production in Vietnam are not yet developed because of the high capital investment requirement. In addition, for a long time, component import tax is below 5% (according to AFTA and WTO), lower than the tariff of import goods to produce the components; hence, leads to the increasing imbalance between assembling and component production.
With the participation of Vietnam into many FTAs in upcoming time, notably TPP, will attract foreign investment strongly, incenting direct investment capital source and the technology transfer, improve management skills, and raise efficiency of business. As the capital continues to flow and Vietnam becomes the choice of many big companies such as Electronics Viet Nam, Samsung, United More SDN.Bhd (Malaysia), Vietnamese enterprises will have the chance to receive the technology transfer from FDI. However, joining TPP allows to less requirements of imports, tariff will be reduced to 0%, making import goods very cheap and will pressure down domestic companies. If Vietnamese policy makers cannot navigate correctly and companies don’t put their efforts to meet demand of TPP market, Vietnam market will be lost to FDI and imported goods.
World’s Total production value has surged since 2012 but seemed to slow down in 2014 and it was 578 billion USD in 2015. This is due to the USD rising along with the interest expectation while the American economy is slow down, which affect the industry development. Besides, the outputs industry - Electronic industry also slowed down due to the plummet of oil price since the second half of 2014.
The global electronics market has long been controlled by developed economies like America, Japan, and some EU countries. Following countries struggled in accessing and participating into the market. In order to do this, they have to pass multinational companies. In the last decade, India and China are named the global workshops; however, recently with the emergence of Vietnam, multinational companies are considering the plant movement to Vietnam due to low labor cost and investment and trade incentives.
In 2014, electronics industry production value was 403 thousand billion VND, accounting for 9.5% in value of the entire industry.
Vietnam’s electronic component industry is young and just operates in the outsourcing aspect through importing basic electronic parts and then assembling to specialized ones and then export. Hence the added value is low, only 5-10% mainly due to the advantage of low cost of labor.
Supporting industry and component production in Vietnam are not yet developed because of the high capital investment requirement. In addition, for a long time, component import tax is below 5% (according to AFTA and WTO), lower than the tariff of import goods to produce the components; hence, leads to the increasing imbalance between assembling and component production.
With the participation of Vietnam into many FTAs in upcoming time, notably TPP, will attract foreign investment strongly, incenting direct investment capital source and the technology transfer, improve management skills, and raise efficiency of business. As the capital continues to flow and Vietnam becomes the choice of many big companies such as Electronics Viet Nam, Samsung, United More SDN.Bhd (Malaysia), Vietnamese enterprises will have the chance to receive the technology transfer from FDI. However, joining TPP allows to less requirements of imports, tariff will be reduced to 0%, making import goods very cheap and will pressure down domestic companies. If Vietnamese policy makers cannot navigate correctly and companies don’t put their efforts to meet demand of TPP market, Vietnam market will be lost to FDI and imported goods.
1. BUSINESS ENVIRONMENT
1.1 Macroeconomic Situation
Figure 1. Nominal GDP by quarter, 2014 – Q2/2016
Figure 2. Contribution of Electronics industry to GDP
Figure 3. VND/USD exchange rate, 2015 – 6/2016
Figure 4. Average lending interest rate in VND, 2010-2015
Figure 5. The structure of population in working age, 2010-2015
Figure 6. Average wages in some Asian countries, 2014
Figure 7. Vietnam’s labor productivity, 2006 – 2015
Figure 8. Top 10 most exported goods, H1/2016
Figure 9. Top 10 most imported goods, H1/2016
Figure 10. Contribution of Electronics, Computers, Phones and Electronic Components to import-export value, 2010-2015
Figure 11. Quarterly Foreign direct investment, 2013 – Q2/2016
Figure 12. FDI attraction in 6 months of 2016 by industry
Table 1. Large FDI projects in electronics field in Vietnam
1.2 Legal Framework
1.3 Impacts of Free Trade Agreements
Figure 13. Commitment on tariff elimination for electronic products in WTO
2 INDUSTRY OVERVIEW
2.1 Global Market
2.1.1 Definition and Classification
2.1.2 Production Process of Electronic Components
2.1.3 Manufacturing network model in electronics industry
2.1.4 Methods of manufacturing electronic components
2.1.5 Production - Consumption
Figure 14. Total production value of components, 2010-2016
Figure 15. Production & Consumption value of semiconductor device, 2010-2015
Figure 16. Market share of semiconductor device consumption, 2015
Figure 17. Revenue of semiconductor by product, 2015
Figure 18. Raw Material Index For Passive Electronic Components, June 2012 – January 2016
2.1.6 Import - Export
Figure 19. Import Market share structure of typical goods
Figure 20. Global component import value, 2010 – 2015F
2.1.7 Production and consumption situation in typical countries
Figure 21. America’s semiconductor market value 1984-2015
Figure 22. Market share and equivalent value of semiconductor producer, 2015
Figure 23. Japan electronic component market’s production value, 2010-2015
Figure 24. Japan's electronic component export and import, 2010 – 2015
Figure 25. Japan's micro electronic circuit import-export structure, 2010 – 2015
Table Korea’s production and export value of semiconductors
Figure 26. DRAM revenue share, Q1/2013 – Q3/2014
Table 2. Growth in production and structure of electronic components towards GDP of Korea
Table 3. List of 10 semiconductor supplier with the highest revenue 2014-2015
2.1.8 Leading companies in electronic component industry
2.2 Vietnamese market
2.2.1 Industry history
2.2.2 The current status of supply chain linkage in electronics industry
Figure 27. Localization rate of Japanese electronic industries in some countries, 2015
Figure 28. World chain value of Samsung and Vietnam
Table 4. Requirements of multinational companies with component suppliers
2.2.3 Production technology
Figure 29. Source of technology in the electronic component industry, 2015
2.2.4 Raw materials
Table 5. Metals in some electronic components
2.2.5 Production
Figure 30. Electronics industry’s production value, 2009 – H1/2016
Figure 31. Electric industry production structure, 2015
Figure 32. Electronic component industry’s production value, 2011 – H1/2016
Table 6. Electronic component production in Vietnam, 2010 – Q1/2016
Figure 33. Quantity of companies and labor in the electronic component industry
Figure 34. Classification of electronic component companies by region 2014
Figure 35. Total capital and fixed assets of the electronic component industry, 2010 – 2014
Figure 36. Revenue and profit of the electronic component industry, 2010 – 2014
Table 7. Some FDI projects into electronic component industry in 2014 – 2015
Figure 37. Electronic Component industry’s index of industrial production
Figure 38. Supply source of electronic components, 2015
2.2.6 Consumption
Table 8. Demand of electronics component products for Vietnam’s electronics industry 2014
Figure 39. Electronic component industry ‘s consumption value, 2010 – H1/2016
Figure 40. Top 10 electronic component companies with 2015’s highest revenue
Figure 41. Electronic component industry’s main customers, 2015
Table 9. Canon Vietnam’s electronic component demand
Table 10. Intel’s component demand
2.2.7 Import - Export
Figure 42. Electronic components’ export turnover, 2010 – H1/2016
Figure 43. Electronic components’ export structure, 2015
Figure 44. Main export forms
Figure 45. Integrated Circuit Export Market Structure, 2015
Figure 46. Top exports with largest proportion of FDI, H1/2016
Figure 47. Export – import turnover of Integrated Circuit, 2010 – H1/2016
Figure 48. Electronic components’ import turnover, 2010 – H1/2016
Figure 49. IC’s import markets structure, H1/2016
Figure 50. Electronic components import by products, 2015
Figure 51. Top imports with largest proportion of FDI, H1/2016
Figure 52. Enterprises with high phones and components import turnover, 2015
2.2.8 Business operation analysis by location
2.3 Industry Risks
Table 11. Minimum wage by region in Vietnam
Table 12. SWOT Analysis
2.4 Development planning
2.5 Prospects and forecasts
2.5.1 Industry driving forces
Figure 53. 10 electric products consuming markets with highest growth regarding value in 2015
Figure 54. Revenue and growth rate of the domestic electronic consumption 2015
2.5.2 Industry outlook
3 ENTERPRISE ANALYSIS
3.1 Enterprise Profiles
3.2 Financial Analysis
Figure 55. Net Revenue
Figure 56. Gross profit and gross profit margin, 2015
Table 13. Sales costs and business management costs
Figure 57. Asset structure
Figure 58. Capital Structure
Figure 59. Liquidity ratio
Figure 60. Activity ratio, 2015
Appendix
1.1 Macroeconomic Situation
Figure 1. Nominal GDP by quarter, 2014 – Q2/2016
Figure 2. Contribution of Electronics industry to GDP
Figure 3. VND/USD exchange rate, 2015 – 6/2016
Figure 4. Average lending interest rate in VND, 2010-2015
Figure 5. The structure of population in working age, 2010-2015
Figure 6. Average wages in some Asian countries, 2014
Figure 7. Vietnam’s labor productivity, 2006 – 2015
Figure 8. Top 10 most exported goods, H1/2016
Figure 9. Top 10 most imported goods, H1/2016
Figure 10. Contribution of Electronics, Computers, Phones and Electronic Components to import-export value, 2010-2015
Figure 11. Quarterly Foreign direct investment, 2013 – Q2/2016
Figure 12. FDI attraction in 6 months of 2016 by industry
Table 1. Large FDI projects in electronics field in Vietnam
1.2 Legal Framework
1.3 Impacts of Free Trade Agreements
Figure 13. Commitment on tariff elimination for electronic products in WTO
2 INDUSTRY OVERVIEW
2.1 Global Market
2.1.1 Definition and Classification
2.1.2 Production Process of Electronic Components
2.1.3 Manufacturing network model in electronics industry
2.1.4 Methods of manufacturing electronic components
2.1.5 Production - Consumption
Figure 14. Total production value of components, 2010-2016
Figure 15. Production & Consumption value of semiconductor device, 2010-2015
Figure 16. Market share of semiconductor device consumption, 2015
Figure 17. Revenue of semiconductor by product, 2015
Figure 18. Raw Material Index For Passive Electronic Components, June 2012 – January 2016
2.1.6 Import - Export
Figure 19. Import Market share structure of typical goods
Figure 20. Global component import value, 2010 – 2015F
2.1.7 Production and consumption situation in typical countries
Figure 21. America’s semiconductor market value 1984-2015
Figure 22. Market share and equivalent value of semiconductor producer, 2015
Figure 23. Japan electronic component market’s production value, 2010-2015
Figure 24. Japan's electronic component export and import, 2010 – 2015
Figure 25. Japan's micro electronic circuit import-export structure, 2010 – 2015
Table Korea’s production and export value of semiconductors
Figure 26. DRAM revenue share, Q1/2013 – Q3/2014
Table 2. Growth in production and structure of electronic components towards GDP of Korea
Table 3. List of 10 semiconductor supplier with the highest revenue 2014-2015
2.1.8 Leading companies in electronic component industry
2.2 Vietnamese market
2.2.1 Industry history
2.2.2 The current status of supply chain linkage in electronics industry
Figure 27. Localization rate of Japanese electronic industries in some countries, 2015
Figure 28. World chain value of Samsung and Vietnam
Table 4. Requirements of multinational companies with component suppliers
2.2.3 Production technology
Figure 29. Source of technology in the electronic component industry, 2015
2.2.4 Raw materials
Table 5. Metals in some electronic components
2.2.5 Production
Figure 30. Electronics industry’s production value, 2009 – H1/2016
Figure 31. Electric industry production structure, 2015
Figure 32. Electronic component industry’s production value, 2011 – H1/2016
Table 6. Electronic component production in Vietnam, 2010 – Q1/2016
Figure 33. Quantity of companies and labor in the electronic component industry
Figure 34. Classification of electronic component companies by region 2014
Figure 35. Total capital and fixed assets of the electronic component industry, 2010 – 2014
Figure 36. Revenue and profit of the electronic component industry, 2010 – 2014
Table 7. Some FDI projects into electronic component industry in 2014 – 2015
Figure 37. Electronic Component industry’s index of industrial production
Figure 38. Supply source of electronic components, 2015
2.2.6 Consumption
Table 8. Demand of electronics component products for Vietnam’s electronics industry 2014
Figure 39. Electronic component industry ‘s consumption value, 2010 – H1/2016
Figure 40. Top 10 electronic component companies with 2015’s highest revenue
Figure 41. Electronic component industry’s main customers, 2015
Table 9. Canon Vietnam’s electronic component demand
Table 10. Intel’s component demand
2.2.7 Import - Export
Figure 42. Electronic components’ export turnover, 2010 – H1/2016
Figure 43. Electronic components’ export structure, 2015
Figure 44. Main export forms
Figure 45. Integrated Circuit Export Market Structure, 2015
Figure 46. Top exports with largest proportion of FDI, H1/2016
Figure 47. Export – import turnover of Integrated Circuit, 2010 – H1/2016
Figure 48. Electronic components’ import turnover, 2010 – H1/2016
Figure 49. IC’s import markets structure, H1/2016
Figure 50. Electronic components import by products, 2015
Figure 51. Top imports with largest proportion of FDI, H1/2016
Figure 52. Enterprises with high phones and components import turnover, 2015
2.2.8 Business operation analysis by location
2.3 Industry Risks
Table 11. Minimum wage by region in Vietnam
Table 12. SWOT Analysis
2.4 Development planning
2.5 Prospects and forecasts
2.5.1 Industry driving forces
Figure 53. 10 electric products consuming markets with highest growth regarding value in 2015
Figure 54. Revenue and growth rate of the domestic electronic consumption 2015
2.5.2 Industry outlook
3 ENTERPRISE ANALYSIS
3.1 Enterprise Profiles
3.2 Financial Analysis
Figure 55. Net Revenue
Figure 56. Gross profit and gross profit margin, 2015
Table 13. Sales costs and business management costs
Figure 57. Asset structure
Figure 58. Capital Structure
Figure 59. Liquidity ratio
Figure 60. Activity ratio, 2015
Appendix
