Workers produce electronic chips at Thach Anh Electronic Chip Production Factory in central Thanh Hoa Province. Electronics firms are being asked to diversify their products and pursue co-operation with experienced and technology-savvy foreign investors to improve production of spare parts and accessories. — VNA/VNS Photo Tran Viet

HA NOI (Biz Hub) — Better policies were needed to improve the capacity of support-industry companies, particularly electronics firms, said deputy minister of Industry and Trade Cao Quoc Hung.

Hung told a recent conference on developing the electronic industry that the ministry was prepared to actively connect domestic firms with multinational companies so that they could take advantage of bigger supply chains.

The ministry plans to promote Vietnamese electronics on its website and open three centres promoting the electronics industry.

He asked firms to diversify their products and pursue co-operation with experienced and technology-savvy foreign investors to improve production of spare parts and accessories.

With nearly 500 companies, Viet Nam's electronics industry has seen steady growth in export sales, pocketing US$6.9 billion in 2011, $20.5 billion in 2012 and $32.1 billion last year. Exports of mobile phones and mobile components accounted for 67 per cent of electronic export revenues last year.

Chairman of the Viet Nam Electronics Industries Association, Luu Hoang Long, said that despite increases in exports, the country's electronics industry was struggling to develop value-adding production and was only a modest contributor to national GDP.

Long said foreign direct investment (FDI) companies accounted for only a third of electronics companies in Viet Nam. He added that FDI firms possessed newer technologies, a domestic market share of more than 80 per cent and contributed more than 90 percent to electronics export turnover.

Few Vietnamese firms in support industries were able to supply inputs to FDI companies, hampered by a lack of experience, capital, technology and marketing.

"Most domestic firms are specialised in processing and assembling," Long said, citing that 80 per cent of electronic products made in Vietnam were electrical appliances, including TVs, computers and telephones. Around 20 per cent of products are made for specialised use.

"This has resulted in an imbalance in the categories of products," he said.

General director of Viettronic Tan Binh, Vu Duong Ngoc Duy, urged the Government to guide domestic companies towards better projects.

Policies are needed to attract foreign firms and encourage domestic companies to tap into the potential of support industries, said Duy. Additionally, any administrative support for firms must be transparent and accessible to firms in the market, he said. — VNS