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Despite decelerating, phone exports still have long-term prospects

Phones and components achieved an export turnover of US$57.9 billion last year, a year-on-year increase of only 0.8 per cent.
A mobile phone assembly line at Samsung Vietnam's factory. — Photo courtesy of the firm

The export of phones and components increased by less than 1 per cent year-on-year and is forecast to continue to face difficulties this year due to the impact of inflation in many countries around the world.

Phones and components achieved an export turnover of US$57.9 billion last year, a year-on-year increase of only 0.8 per cent, according to the latest data from the General Department of Customs.

Exports to China reached $16.26 billion, up 7.1 per cent; to the US reached $11.88 billion, up 22.5 per cent; to the EU reached $6.7 billion, down 15.1 per cent; to South Korea reached $5.05 billion, up 5.3 per cent.

The phone exports grew slowly in the last months of last year, when export orders declined sharply due to the impact of economic slowdown and inflation in many major import markets of the country such as the US, EU, and Japan.

Particularly in December, the export turnover of this item reached $3.1 billion, down 31.4 per cent from the previous month.

A report by HSBC said that after more than two years of booming trade, a period of "stagnation" has come to Vietnamese key export industries since the fourth quarter of last year.

Global orders fell sharply, affecting Asian exporters and Vietnam was no exception.

Among the key export sectors of Vietnam, including textiles, footwear, computers, furniture, mobile phone export has the largest influence.

Accounting for an increasingly large proportion (over 17 per cent) of the country's total export turnover, the growth of phones and components has a great influence on the overall export growth.

However, over 95 per cent of the export turnover of this product belongs to FDI enterprises.

HSBC pointed out that the reason for the decline in exports in the last month of last year came from the electronics sector, which accounts for about 35 per cent of Vietnam's total export turnover.

New electronic orders in the world have begun to decline sharply from the second half of last year, affecting the consumer electronics sector more than industrial products.

The impact occurs on a large scale in the three main export destinations of Vietnam, the US, China and Europe.

Exports are still facing "headwinds" in the first month of the new year and it is forecast that the drag on exports will at least last until the end of the second quarter.

The export turnover of phones reached US$4 billion last month, down 19.6 per cent over the same period.

Vietnam was badly affected when global trade slowed, seeing its exports drop significantly for the first time compared to the past two years.

In particular, the decline stems from the economic downturn in the US, the largest export destination of Vietnam, followed by the EU.

Although decelerating, in the medium and long term, the phone and component manufacturing industry is still "leading" in terms of exports, because up to now, this field has attracted a huge amount of FDI into production.

Samsung alone has accumulated capital in Vietnam reaching $18.2 billion.

In recent years, the electronics and phone manufacturing industry has had many opportunities to welcome the investment wave from large technology corporations to move to Vietnam.

A series of large outsourcing partners of Apple and LG such as Foxconn, Luxshare, GoerTek, and Compal all have factories located in Vietnam or have relocated from China, creating an increasingly large production and supply capacity, making Vietnam an important export address in the production chain of this industry on the global map.

The export turnover of the group of phones and components increased by 9.2 times from 2010 to 2013, becoming the group with the highest export value and this position has been maintained continuously since 2013.

When Vietnam became the world's new production base, billions of dollars of FDI inflows from global corporations and businesses poured in, along with extensive opening and integration with the world through a system of free trade agreements (FTA), the export value of key manufacturing industries from phones and components increased every year.

In the two years of 2021 - 2022, although the economy was greatly affected by the COVID-19 pandemic, this group of goods still achieved a high and stable growth rate, and the export value continued to grow sharply, reaching $57.5 and $57.9 billion respectively, accounting for over 17 per cent of total export turnover. 

Source: Vietnam News


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