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VietNamNews

Short circuit in electronics trade

Update: September, 07/2012 - 10:44

 

Producing electronic parts at Japanese-invested Nidec factory in HCM CIty.Five FDI electronics firms in HCM City accounted for nearly 28 per cent of the total turnover of VND23.4 trillion. — VNA/VNS Photo Van Khanh
HCM CITY — The electronics and hardware industry in HCM City has significantly declined since 2010, a recent survey has found.

The survey, carried out by the HCM City Computers Association (HCA), found that in 2010, the industry had recorded a turnover of VND26 trillion (US$1.3 billion approx.), accounting for 22 per cent of the total national turnover. However, this slumped to 16 per cent last year, although the turnover increased to VND38 trillion.

The survey found that most enterprises with large turnovers were foreign companies, a few of them in HCM City.

Desktop assembling is major income earner for Vietnamese enterprises. However, low localisation ratios and large borrowings from banks meant that last year, just 20 per cent of local desktop-assembling firms made a profit.

But these enterprises will face more challenges this year as desktops are sold mostly to offices and projects that are suffering from the ongoing economic downturn. Individuals and households now prefer laptops and tablets.

The survey also found that just five FDI companies in HCM City accounted for nearly 28 per cent of the total turnover of VND23.4 trillion recorded by 103 companies in 2010. This increased to 38.5 per cent in 2011.

Nguyen Trong Duong, head of the Information and Communications Ministry's ICT department, said at a recent conference that in 2011, the national hardware industry posted a turnover of $11.3 billion, or 82 per cent of the information technology industry, but domestic enterprises had just 10 per cent.

Three important segments, telecommunication equipment, mobile phones and laptops, were all dominated by FDI enterprises.

The hardware assembling industry, set up in 1995, marked a decline with the withdrawal of Sony in 2005.

Industry insiders and experts have said local enterprises should focus on strategies to develop support industries for big FDI enterprises, promote research and development (R&D) and invest in special designs and products that meet local demands.

After establishing a strong foundation, Vietnamese enterprises can enter desktop and laptop production through joint-ventures or mergers and acquisitions (M&A), they say. — VNS

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