NEPCON highlights electronics shift

NEPCON Vietnam 2019, held in Hanoi last week, set the stage for 200 electronics brands from around 20 nations and territories

Since the EU-Vietnam Free Trade Agreement was signed on June 30, there are now many new doors open for Vietnamese electronics companies that also bring more prospects for supporting industry companies. Last week, the annual NEPCON exhibition came to Hanoi for the fourth time. It is Vietnam’s only exhibition on surface-mount technology, testing technologies, equipment, and supporting industries for electronics manufacturing.

The event aimed to gather state-of-the-art technologies and solutions from over 200 brands, updating on the hottest trends via onsite forums and conferences, and serving attendants with complementary business matchmaking programmes.

Mark Andrew Rinehart, director of White Horse Laboratories Ltd., said, “There are more companies and businesses participating in the exhibition than I imagined. For me, this is a valuable opportunity to learn more about the development of the electronics manufacturing industry as well as to search for high-quality products.”

His company focuses on providing testing and quality control services, as well as educating the industry on standards, processes, terminology, risks, and requirements. White Horse is one of many firms looking for opportunities to lower costs in their facilities and participate in the investment wave to Vietnam.

Vu Trong Tai, general manager of Reed Tradex Vietnam said since a plethora of emerging opportunities is knocking on the market’s door, it is vital for electronics manufacturers to tap into and leverage the opportunities by joining the NEPCON event.

More and more supply chain and procurement managers are involved in outsourcing decisions and are taking a closer look at Vietnam, with companies like Nintendo and Apple supplier Goertek announcing their intention to begin producing in Vietnam. Cheng Uei Precision Industry Co., Ltd. and Pegatron Corporation, which supply chargers and connectors for iPhones, are also considering expanding production overseas, including in Vietnam.

Meanwhile, big names like Samsung, LG, Microsoft, and Intel have already picked Vietnam as their production base and began relocating technology and equipment from many nations, including China, Malaysia, Thailand, and Costa Rica.

According to Do Thi Thuy Huong, representative of the Vietnam Electronic Industries Association, globalisation has created fierce competition in the local supporting and electronics industries. Thus, enterprises need to create a network with one another and foreign partners.

In a recent interview with VIR, chief representative of the Japan External Trade Organization (JETRO) in Hanoi, Hironobu Kitagawa, said, “Electronics, automation, and automotive are all sectors with high potential. Growth in robotics and automation is propelled by the need to improve competitive capabilities in the industry by improving efficiency, production stability, and cost control.”

Kitagawa added that Vietnam is expected to be more attractive for foreign investors thanks to the increasing localisation rate for parts production, especially in the manufacturing industry.

“It is essential for the country to focus on priority sectors and adopt appropriate policies to strengthen the links between Vietnamese and foreign companies to improve the economy. The JETRO will provide assistance for the development of supporting industries in Vietnam,” he said.

However, most electronic companies in Vietnam are small- and medium-sized enterprises (SMEs), which make up a major pillar of Southeast Asia’s developing economies. In order to support them, the United States Agency for International Development is deploying the LinkSME project during 2018-2023 with a total budget of $22.1 million, which strengthens relations between suppliers and buyers, as well as boosting participation of SMEs in global value chains.

LinkSME was also an active participant of the NEPCON event.

Nguyen Thi Xuan Thuy, deputy director of the Industrial Development Centre under the Ministry of Industry and Trade, said at last week’s conference that if Vietnam’s electronics and supporting industries could develop a supply network and provide products matching international standards, their competitiveness and ability to join global supply chains would improve rapidly.

“Additionally, updating information and approaching support from trade and investment promotion initiatives would also contribute to making breakthroughs for businesses,” Thuy said.