Speaking to Doanh Nhan (Entrepreneur), Ms Do Thi Thuy Huong, Vice Chairwoman and General Secretary of the Vietnam Electronic Industries Association (VEIA), highlighted that this influx marks a catalyst in a new investment trajectory – one aimed at fostering more sustainable, long-term productive value.

However, as competitive advantages shift – with AI, green transition, and ESG compliance replacing cheap labour and cost incentives as non-negotiable requirements in global supply chains – Vietnamese enterprises are entering a demanding new era of competition.

The manufacturing sector, particularly electronics, is widely viewed as a magnet for new-generation FDI. How does this latest growth cycle of high-quality FDI capital differ from previous investment waves?

Global supply chains are undergoing a structural shift. As major multinational corporations expand their manufacturing footprints, they are delivering a powerful boost to Vietnam’s electronics sector.

Crucially, this new generation of FDI does more than just inject tech-intensive capital and drive export volumes. It brings innovation capabilities and commitments to technology transfer, laying the groundwork for Vietnam to build its own indigenous technological capacities.

In the electronics domain, foreign multinationals are no longer merely hunting for cost-competitive suppliers. Instead, they are prioritising strategic partners capable of guaranteeing consistent product quality, data transparency, and active co-innovation.

As competitive advantages and the role of Vietnamese firms within these chains evolve, what new core competencies are required, madame?

Building on the foundation established over the past decade, domestic firms are making sustained efforts to move up the value chain. We were once stuck at the bottom of the industry’s "smile curve", but local enterprises are now climbing out of the trough. Moving beyond simple contract assembly, many have moved up to higher-value activities—such as R&D, design, and key segments of supply provision. This marks the dawn of a new phase of growth, where local companies partner with lead firms to co-develop products and expand capacity alongside them.

This transition demands five essential capabilities: technological and innovation capability to move from merely applying technology to mastering it; quality assurance and international compliance to meet stringent global standards consistently; high-calibre human ressources to cultivate a skilled and adaptable workforce; strategic ecosystem linkages to build strong networks to secure long-term resilience; and agility to maintain high operational responsiveness.

The outlook appears bright, yet this new competitive landscape brings intense pressure. In your opinion, what are the key hurdles domestic firms must overcome?

The primary pressure comes from increasingly rigorous global standards regarding sustainability, emissions control, data transparency, and local content requirements. Compliance with these criteria acts as the ultimate "passport" determining whether local firms can enter global supply chains at all. 

This is a pivotal moment for Vietnamese enterprises to overhaul their growth mindset. They must proactively invest in core R&D, accelerate digital and green transitions, cultivate the broader electronics ecosystem, and boost localization rates to scale up their production and operational capabilities.

Transformation requires substantial capital investment, which presents a major bottleneck for a sector dominated by SMEs. What policy mechanisms will the VEIA propose to the Government to support businesses in the coming period?

Navigating these twin opportunities and challenges, the VEIA recommends that the Government continue refining incentive frameworks for electronics, semiconductors, AI, and data centres. Simultaneously, focus must be placed on developing a supporting industrial ecosystem built on three core pillars: high-quality human resources, robust R&D capabilities, and strong inter-firm and industry-academic linkages.

Building a resilient network of domestic enterprises – capable of integrating into the supply chains of foreign giants – is a critical precondition for establishing national industrial strength and driving higher economic value-add.

Furthermore, we propose tailored tax and credit policies to help businesses invest in tech upgrades, build smart factories, and deploy AI in production. Above all, structured human capital development must be prioritised. Innovation can only thrive when people are placed at the heart of strategy. Technology can be bought and equipment can be funded, but driving those machines and pioneering new innovations ultimately relies on human ingenuity.