Electronics FIEs asked to expand Vietnamese supplier networks
Foreign invested electronics companies are being urged to expand their Vietnamese supplier networks and help domestic businesses move deeper into global supply chains
Government Office Notice No. 481/TB-VPCP, released on September 14, instructed foreign-invested enterprises (FIEs) to broaden their networks of Vietnamese suppliers, along with sharing technical standards and quality management processes, to bolster Vietnam's electronics ecosystem. This initiative aimed to shift the electronics and semiconductor supply chains from lower-value stages to more complex processes, thereby increasing the involvement of Vietnamese businesses.
The government also challenged domestic companies to enhance their capabilities in technology, quality management, automation, digital transformation, R&D, and human resources, aiming for a gradual transition from low-value-added tasks to manufacturing components and materials. Furthermore, it sought to establish a stronger correlation between imports, domestic production, and exports, encouraging companies to utilize imported resources effectively to enhance productivity and contribute to domestic value addition and exports.
Domestic value addition in the electronics industry remained low, and local suppliers' participation in production and supply chains was limited, prompting the Ministry of Industry and Trade (MoIT) to collaborate with businesses demonstrating significant import-export disparities. These businesses needed to devise strategies for heightening value addition, expanding local supplier networks, and incrementally improving their trade balance.
The MoIT also planned to devise a program specifically targeting the establishment and enhancement of Vietnamese suppliers for electronics, semiconductor, and technology corporations, both domestically and internationally. This development push was further complemented by financial incentives from the Ministry of Finance, which contemplated reviewing tax incentives for electronic components and materials production and fostering policies that would promote domestic manufacturing without hindering the import of machinery, equipment, and materials currently unavailable locally.
The State Bank of Vietnam was tasked with devising suitable credit policies for electronics supporting-industry entities and businesses investing in technological innovation, automation, and digital transformation, especially small- and medium-sized enterprises seeking to integrate into electronics and semiconductor supply chains.
The Ministry of Science and Technology was instructed to prioritize assistance for Vietnamese companies conducting research and mastering core technologies in semiconductors, integrated circuits, electronic materials, and automation, aiming to elevate the value generated by Vietnamese businesses within global electronics supply chains and facilitate their progression from merely manufacturing to engaging in components, materials, and technology-intensive stages as foreign investors deepen their supplier networks within Vietnam.
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
