Vinh Phuc’s key industries such as automobile and motorbike have experienced a decline in investment flows due to global and domestic economic slowdown. However, the electronics industry has maintained its growth momentum and made considerable contributions to the province’s overall growth in the first six months of 2023.
The province’s electronics industry has continued to grow and has made significant contributions to the local overall growth
Vinh Phuc currently has nearly 200 electronics projects, accounting for about 60% of total industrial projects in industrial parks and 50% of total industrial production value, thus becoming a driving force for the overall growth of Vinh Phuc province. In the first six months of 2023, the electronics industry grew by 14.17% and contributed 2.82 percentage points to the overall growth of the province.
Huge contribution to industrial and labor value
The FDI electronics companies account for nearly 50% of total FDI firms in the province. Up to 90 companies are classified as large scale and their products are being exported or supplied to giant electronics corporations in Vietnam such as Samsung, LG, and Panasonic.
The electronic component manufacturing industry accounts for about 50% of the industrial production value and serves as the main driving force for the overall growth of Vinh Phuc province. Electronics and electrical equipment have become one of the two largest industrial sectors by production value and labor force in the province.
Electronics companies are employing more than 75,000 workers, accounting for 65% of the headcount in FDI firms in industrial parks. In recent years, despite being affected by the COVID-19 pandemic, the electronics manufacturing industry has managed to maintain high growth.
In 2022, Vinh Phuc’s revenue reached VND194,103 billion (US$8.5 billion), up 24.4% year on year, and the export value jumped 15%.
Despite being hit by the world economic downturn in 2023, the province’s electronic component manufacturing industry remained a bright spot. Following a deep decline in January 2023, double-digit growth returned, with 19.13% growth in April and 15.8% in May. The 6-month added value jumped 14.17% and contributed 2.82 percentage points to the province’s GRDP growth.
According to the province’s statistics, computers, electronic products, and components have well exploited traditional markets and sought and developed new ones such as the United States, ASEAN, Japan, South Korea, and the EU, including the Netherlands, Germany, and the Czech Republic.
With the presence of many electronics firms such as Compal Vietnam Co., Ltd. (Taiwan) that manufacture laptops and peripherals, Vinh Phuc is considered to have much potential for developing computers, smartphones, and electronic products.
During the first half of 2023, the electronics industry experienced a growth rate of 14.17%, contributing 2.82 percentage points to the overall growth of the province.
Increased investment inflows
The resolution of the 17th Vinh Phuc Party Committee (2020-2025 term) underscores the goal of prioritizing investment flows for high-tech electronics zone development, making Vinh Phuc a national center of the electronics industry. Mr. Nguyen Van Do, Director of the Department of Planning and Investment of Vinh Phuc province, stated that the province continues to apply selective investment attraction based on economic, social, and environmental criteria.
In 2021-2030, the province will develop a policy to attract disruptive high-tech electronics investment projects to entice giant corporations, high-quality investment flows, and high-tech projects. Accordingly, Vinh Phuc aims to woo multinational corporations with value chains (design, R&D and marketing, brand management chains) and contract-based manufacturers for global value chains of the high-tech manufacturing industry.
Priority will be given to attracting industrial projects that manufacture key products in global value chains, including electronic and electrical components and equipment, industrial electronic products, telecom devices, computers, mobile phones, and electronic parts for production and export.
The province will focus on enticing American and Japanese businesses along the global computer value chain. At the lower end of the chain are Taiwanese subcontractors.
The province will prioritize and encourage existing FDI smartphone and electronics firms in Vinh Phuc (and Vietnam). It will also target giant domestic corporations (such as Vsmart, Viettel, and VNPT) and supporting industrial projects to build a supplier system and form a production network in the province. Vinh Phuc province will actively approach leading computer, telephone, and electronic equipment firms and their suppliers to persuade them to invest in the locality.
The economy is forecast to face headwinds in the last six months of the year due to global economic uncertainties. In order to maintain industrial growth momentum, leaders of Vinh Phuc province have reaffirmed their commitment to removing business difficulties for companies and supporting them in innovation, technology transfer, productivity improvement, and product quality. This will provide greater opportunities for companies to deeply participate in the global supply chain, increase export value, and contribute to the overall growth of the province.
Vinh Phuc has developed an investment attraction policy for disruptive high-tech electronics projects to entice giant corporations, high-quality investment flows, and high-tech projects. Accordingly, the province has offered preferential infrastructure rents in industrial parks and supported the cost of making environmental impact assessment (EIA) reports for electronics investment projects. The province has also leveraged other electronics investors to do business in the province, thus making them contribute more to the province’s socioeconomic growth.
By Hien Nam, Vietnam Business Forum