Electronics Manufacturing in Vietnam: A Rising Power in Global Supply Chains

Vietnam is no longer just a low-cost alternative in Southeast Asia. Over the past decade, it has quietly evolved into one of the most strategic centers for global electronics manufacturing. In 2024 alone, Vietnam’s electronics exports soared to approximately $126.5 billion, an all-time high that underscores its pivotal role in the international tech supply chain.

Much of this growth is thanks to Vietnam’s strategic location, its growing industrial infrastructure, and the confidence global electronics giants have placed in it. Samsung, for instance, produces over half of its global smartphone output from Vietnam. With production complexes in Bac Ninh and Thai Nguyen provinces, Samsung remains the single largest foreign investor in the country. Likewise, Intel has invested over $1.5 billion into its assembly and test facility in Ho Chi Minh City, which is among the largest of its kind globally.

Why are companies betting big on Vietnam?

For starters, the labor force is skilled and relatively young, with a strong aptitude for technology-related work. This talent is supported by more than 350 vocational and technical schools offering electronics-focused training, ensuring a consistent pipeline of qualified workers.

Vietnam’s cost competitiveness is another key factor. While wages have risen slightly in recent years, they remain significantly lower than in China, making it an attractive location for labor-intensive manufacturing. But low costs are only part of the equation. Vietnam has also become increasingly well-integrated into global trade networks. Its membership in free trade agreements like the EVFTA (EU-Vietnam Free Trade Agreement) and the CPTPP gives it access to over 50 markets with reduced tariffs—crucial advantages for electronics exporters targeting Europe and North America.

One of the most exciting developments is the growth of Vietnam’s semiconductor ecosystem. As global demand for chips remains high, Vietnam has positioned itself as an emerging hub for backend semiconductor assembly, testing, and packaging. The market is expected to hit $18.23 billion by the end of 2024, as companies shift capacity from China and Taiwan due to rising geopolitical risks.

Vietnam’s provinces like Bac Ninh, Hai Phong are seeing a surge in high-tech investments, not just from Korea and the U.S., but also from Japan, Taiwan, and European tech firms looking to diversify production. Smart city zones and high-tech parks are being expanded to accommodate this influx. Meanwhile, Vietnam’s government has committed to developing its own chip design and R&D capabilities through foreign partnerships and public-private collaboration.

Despite these promising trends, the path forward isn’t without friction. One of the emerging risks is tariff exposure. The U.S. recently signaled that it might re-evaluate trade privileges for Vietnamese electronics, citing trade imbalances and the potential misclassification of origin in some exports (Reuters, 2025). While the government has responded swiftly by strengthening anti-fraud measures, any change in U.S. tariffs could affect Vietnamese SMEs that are deeply integrated into American tech supply chains.

Supply chain resilience remains a critical challenge. While Vietnam has established itself as a leader in final assembly and packaging, it still relies heavily on imported inputs, particularly semiconductors, sensors, and rare earth elements sourced predominantly from China and South Korea. This dependency exposes the sector to upstream disruptions, as seen during the COVID-19 pandemic and the recent Red Sea shipping crisis. In response, Vietnamese manufacturers are increasingly prioritizing localized sourcing and venturing into upstream capabilities such as PCB production and chip design. The long-term strategic advantage will come from moving up the value chain, transitioning from assembly-focused operations to more integrated, high-value manufacturing.

So what does this mean for global brands and procurement teams?

It means Vietnam is no longer just “a cheaper China.” It is now a vital link in the global tech supply chain, offering scalability, geopolitical balance, and improving vertical integration. Companies looking to diversify production, mitigate risks, and maintain cost efficiency should seriously consider Vietnam—not just for phones or TVs, but increasingly for semiconductors, smart home devices, wearables, and industrial electronics.

As the country continues to deepen its capabilities and expand its infrastructure, it’s poised to play a defining role in the future of global electronics manufacturing. For importers and OEMs, getting into Vietnam’s ecosystem now means gaining first-mover advantages in a market that’s just getting started.