Vietnam is now the world’s fifth-largest exporter of electronics, computers, and components, and ranks second globally in exports of mobile phones and related components. Its electronics exports exceeded $134.5 billion last year, contributing more than one-third of its total export value. In the first five months of 2025, meanwhile, export turnover from the electronics sector reached over $60.8 billion, a 39 per cent year-on-year increase. This strong performance has further reinforced Vietnam’s role as a strategic hub in the global electronics supply chain.

Importantly, the government’s recent rollout of national strategies for semiconductor development through 2030, with a vision to 2050, signals a bold move to build internal capabilities. These plans aim to accelerate talent development, enhance localization efforts, and position Vietnam as a proactive player in advanced research and industrial manufacturing.

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At the recent M-TALKS 2025 forum, with the theme “Innovating the Future of Electronics Manufacturing in Vietnam: AI, Automation & Global Integration”, Mr. Tran Hong Quan, Commercial Director of RX Tradex Vietnam, remarked that amid increasing global geopolitical and technological shifts, Vietnam is gaining recognition as a prominent electronics manufacturing hub in both the region and the world.

Global tech leaders such as Samsung and Apple, along with major Apple partners like Foxconn, Luxshare, and Goertek, are steadily scaling up their investments in Vietnam. Quatron is actively expanding its research and development (R&D) operations, while NVIDIA has signed strategic agreements with the Vietnamese Government to develop R&D and AI-focused data centers.

Yet, behind the headline-making export figures lie a set of pressing challenges. Mr. Quan noted that the entire export value of mobile phones currently comes from foreign-invested enterprises. Meanwhile, around 80 per cent of the components used in mobile phone production are still imported, and over 90 per cent of Tier-1 suppliers serving major manufacturers are foreign-owned. Domestic R&D capabilities remain limited, with Vietnam still primarily positioned as an assembly base within the global supply chain.

Ms. Do Thi Thuy Huong, Vice Chairwoman of the Vietnam Association for Supporting Industries, also emphasized the strategic role of electronics in the national economy. The sector now contributes nearly 18 per cent of total industrial output, placing Vietnam among the top 15 electronics exporters globally. The US stands as Vietnam’s largest export market, accounting for close to 29 per cent of the country’s total electronics export turnover. In several product segments, exports to the US exceed 40 per cent. On the supply side, China remains the dominant source of materials and components, providing roughly 80 per cent of the inputs used across Vietnam’s electronics production chain.

Vietnam’s electronics industry remains heavily centered on manufacturing activities involving computers, electronic goods, optical devices, and consumer products like mobile phones. The mobile phone manufacturing landscape is currently led by major players such as Samsung, Apple (with expanded assembly through Foxconn), and Luxshare. Vietnamese companies, in contrast, are largely small and medium-sized enterprises (SMEs) that participate in low-value-added stages of production and depend significantly on imported components from China, ranging between 30 to 80 per cent depending on the segment and type of product.

Tariff-related pressure

Commenting on the impact of US tariffs, Ms. Huong noted that rising production costs and surging raw material prices have significantly affected Vietnam’s profitability and competitiveness. At the same time, logistics costs are climbing as companies are forced to seek alternative sources or change shipping routes to avoid tariffs. These adjustments lead to longer delivery times and higher freight charges, driving up overall product costs and disrupting delivery timelines. As a result, Vietnamese exports become more expensive and less competitive in the US market.

She pointed out that manufacturers in the electronics supply chain are facing multiple pressures. These include growing exposure to US trade remedy investigations, shrinking access to key export markets, and the urgent need to diversify market reach. Higher production costs are diminishing Vietnam’s competitive edge in the US compared to other sourcing destinations. “US tariffs have become a catalyst for global supply chain realignment,” Ms. Huong explained. 

According to Mr. Quan, these challenges mark a turning point for Vietnam, a critical moment to move beyond its role as an assembly hub and evolve into a manufacturing powerhouse with deeper integration and greater value creation within the global supply chain.

From risk to resilience

In the face of global uncertainties and mounting pressure from US tariffs, Ms. Huong recommended that Vietnamese businesses take proactive measures to safeguard their growth and competitiveness. These include diversifying export markets, strengthening partnerships with US counterparts, restructuring production towards higher value-added output, preparing for scenarios involving elevated tariff rates, accelerating digital transformation and e-commerce adoption, leveraging government and industry association support, and preparing for non-tariff risks.

She emphasized the importance of capitalizing on Vietnam’s network of 17 next-generation free trade agreements (FTAs) with nearly 70 economies. These agreements offer Vietnam a major competitive advantage in exporting to markets such as the EU, Japan, South Korea, and China. “India represents a highly promising opportunity,” Ms. Huong noted. “With the world’s largest population and a strong, growing relationship with Vietnam, it’s a market worth exploring further. Niche markets in Northern Europe, South America, the Middle East, and Africa also offer great potential, with relatively low competitive pressure.”

Alongside market expansion, businesses must develop long-term strategies, such as investing in market research and brand building in new markets to reduce exposure to tariff volatility in the US. Companies should also engage in advocacy, working with the government and long-time US partners to negotiate shared costs or trade facilitation. Where possible, they should actively seek to become part of US supply chains operating in Vietnam.

Ms. Huong also stressed the critical need to restructure production models and enhance value creation. While this supports short-term adaptation to tariff impacts, it also lays the foundation for long-term business resilience. Investment in innovation and digital transformation, she noted, will enable Vietnamese companies to shift their production structure, increase value-added output, and reduce dependency on Chinese inputs. She also added that Vietnam’s electronics sector could leverage tariff pressures as a catalyst to move into higher-value segments like semiconductors and expand into untapped, tariff-free markets.

On the policy front, Ms. Huong urged the government to tighten controls on trade fraud, particularly cases where foreign businesses disguise their products as “Made in Vietnam” to exploit third-party exports. At the same time, she called for government-led programs to support businesses in digital transformation and boost the import of advanced technologies from the US.

To shape the future of Vietnam’s electronics manufacturing sector, Mr. Tran Duc Hoa, Deputy Director of the Business Center at VNPT Technology, underscored that the most important factor lies in the readiness of businesses themselves. Enterprises must anticipate shifts, develop responsive strategies, and stay ahead of market changes. Meanwhile, government policies should continue to create enabling conditions that help Vietnamese firms grow and adapt in a rapidly-changing global environment.