electronic components industry report in …...5 • supporting industries, components production in...

1

ELECTRONIC COMPONENTS INDUSTRY REPORT IN Q2/2018

2

Content

Section Page Section Page

Abbreviations 3 2.2.1. History of industry establishment and development 51

Executive summary 4 2.2.2. Value chains in electronics industry 52

1. Business environment 6 2.2.3. Production technology 57

1.1. Macroeconomic situation 6 2.2.4. Input materials 58

1.2. Legal framework 13 2.2.5. Production 59

1.3. Impact of free trade agreement 19 2.2.6. Consumption 68

2. Industry overview 28 2.2.7. Import and export 72

2.1. Global market 29 2.2.8. Analysis of business activities by regions 83

2.1.1. Definition and classification 29 2.3. Industry risks 89

2.1.2. The process of manufacturing electronic components 30 2.4. Industry development planning 94

2.1.3. Network model of production in the electronics industry 31 2.5. Outlook and forecasts 99

2.1.4. Methods of producing electronic components 32 2.5.1. Driving forces for industry development 100

2.1.5. Production and consumption 33 2.5.2. Forecasting industry outlook 104

2.1.6. Imports and exports 37 3. Enterprise analysis 105

2.1.7. Situation of production and consumption in some

typical countries39 3.1. Introduction of enterprises 106

2.1.8. Leading companies in the industry 46 3.2. Financial analysis 109

2.2. Vietnam market 50 4. Appendix of financial statement 114

3

Abbreviations

CIEM Central Institute for Economic Management SIA Semiconductor Industry Association

IT Information technology SIDEC Supporting industries development enterprises center

SI Supporting industries IP Intellectual Property

HT High technology SMT Surface Mount Technology

EI Electronic industry SMD Surface Mount Device

DBS Development bank of Singapore IP Industrial production

FIA Foreign investment agency MC Multinational corporations

FTA Free trade agreements GSO GENERAL STATISTICS OFFICE of VIET NAM

VA Value added GDVC General Department of Vietnam Customs

JEITAJapan Electronics and Information Technology

Industries AssociationLtd Limited

JETRO Japan External Trade Organization TPP Trans-Pacific Partnership Agreement

IA Industrial area VEIA Vietnam Electronic Industries Association

MFN Most favored nation WTO World Trade Organization

SBV State Bank of Vietnam WTST Trung tâm thống kê thương mại chất bán dẫn

NBS Nation Bureau of Statistics of the People's Republic of China

4

Executive Summary

•

Vietnam is shifting its industry to processing and manufacturing sectors, reducing its reliance on mining because of increasingly depleted natural

resources and more difficult conditions for mining and also fluctuating prices.

• The world electronics market has long been dominated by industrialized countries such as the United States, Japan and some EU countries.

THE CONTENT IS INTENTIONALLY REMOVED FOR DEMO

PURPOSE

5

• Supporting industries, components production in Vietnam has not developed because this is a sector that requires large capital investment.

• Vietnam's participation in many trade agreements in the future will help attract foreign investment, especially for direct investment, promote

technology transfer, improve the level of business management, and increase productivity of business.


PURPOSE

Executive Summary

6

Content

1 Business environment

1.1 Macroeconomic situation

1.2 Legal framework

1.3 Impact of free trade agreement

7

1. Business environment


Sources: VIRAC, GSO

Sources: VIRAC, GSO

• Gross domestic product in the first quarter of 2018 is estimated to increase

by 6.81% compared to 2017.

•

In the first quarter of 2018, although mining declined sharply

from the previous year, industrial production continued to grow positively

thanks to the contribution of the processing and manufacturing industry.

Billion VND

Production value of the electronics industry, 2009-2017e

GDP growth rate, 2011 – Q1/2018


PURPOSE

8

Average interest rates have the tendency to decrease

In Q1/2018, the VND / USD exchange rate was quite stable around

VND 22,463.

%

Sources: VIRAC, SBV

VND/USD exchange rates, 2013 – December/2018

Interest rates, 2012 – Q1/2018

Sources: VIRAC, GSO




PURPOSE

9

• The gold population structure with the population in the working age by the end of 2017 is still high with 54.8 million people accounting for 58.5% of

the total population of Vietnam, which is one of the competitive advantages of Vietnam compared with the trend of aging population of the world

today.

Labor productivity in Vietnam, 2011-2017e

Sources: VIRAC, GSO

Million VND/laborTotal population and population structure in working age from

2010 to 2017

Sources: VIRAC, GSO

Million people




PURPOSE

10

Vietnam is gradually becoming a

factory producing and assembling components for electronic products of many

big companies in the world such as Samsung, LG, Canon, Toshiba

The proportion of import-export value of electronics, computers,

phones and components, 2010 – Q1/2018e

Sources: VIRAC, GDVC

Billion USD


Most imported goods, Q1/2018e


Billion VND

Most exported goods, Q1/2018e




PURPOSE

11

• FDI in the first quarter of 2018 has a strong growth

Sources: VIRAC, FIA

Sources: VIRAC, FIA

Billion USD

FDI attraction by sectors, Q1/2018e

FDI capital, 2014-Q1/2018

• In 2017, foreign investors invested in 19 industries,




PURPOSE

12

Major FDI projects in electronics industry of Vietnam

Sources: VIRAC, SIDEC, FIA

No. Projects LocationInvestment

capitalMain products Operating year

1

2

3

4

5

6

7

8

9

10




PURPOSE

13

Content



1.2 Legal framework



1.2 Legal framework

14

1.2.1. Tax polices

In terms of import and export

In terms of value added tax


PURPOSE

15

1.2.1. Tax policies

In terms of corporation tax

1.2.2 Labor policies


1.2 Legal framework


PURPOSE

16

1.2.3 Credit policies

1.2.4. Land policies


1.2 Legal framework


PURPOSE

17

1.2.5 Technology policies


1.2 Legal framework


PURPOSE

18

1.2.6. Policies related to environment and food safety

1.2.7. Other policies


1.2 Legal framework


PURPOSE

19

Content



1.2 Legal framework


20

Vietnam trade integration process from 1995 to present

Until the end of the first quarter of 2018, Vietnam has signed, implemented, and is negotiating a total of 16 FTAs. Accession to international trade

agreements brings opportunities and challenges for domestic firms.

1. Business Environment

1.3 Impact of free Trade Agreements


PURPOSE

21

1.3.1. WTO - Vietnam is the 150th member of the WTO on November 7, 2006

Commitments

In terms of taxation, electrical and electronic equipment is one of the groups under the commitment of the highest tariff reduction in tariff schedule of

Vietnam in WTO.

No. Indicators

MNF pre-

participating

tax rates (%)

Tax rates in the commitments of

WTO

When

participating

(%)

Final (%)

Commitment to reduce import tariffs in the WTO for electronic products




PURPOSE

22

The impact of the WTO on the electronic components market in Vietnam :

Positive impact

Negative impact




PURPOSE

23

1.3.2. Comprehensive and Progressive Agreement for Trans-Pacific Partnership




PURPOSE

Commitments

Positive impact

24

Negative impact




PURPOSE

1.3.3. Free Trade Agreement between EU and Vietnam (EVFTA)

25

1.3.4. Regional Comprehensive Economic Partnership (RCEP)




PURPOSE

26




PURPOSE

1.3.5. The Free Trade Agreement between the Socialist Republic of Vietnam and

the Eurasian Economic Union (EAEU)

27

1.3.6. Other agreements




PURPOSE

28

Content

2 Industry overview

2.1 Global market

2.2 Vietnam market

2.3 Industry risks

2.4 Industry development planning

2.5 Outlook and forecasts

29

2. Industry overview

2.1. Global market– 2.1.1. Definition and classification

Definition

Classification

List of some electronic components:


PURPOSE

30

Demonstration of the process

Source: VIRAC


2.1. Global market– 2.1.2. The process of manufacturing electronic components


PURPOSE

31

• Starting from cheap labor as well as location advantage in indigenous markets and with the boom of the Internet, developing countries including

Vietnam have more opportunities to participate in the supply chain of electronic products in the global market.

Network model of production in the electronics industry

• Associating with high-tech FDI corporations is an

indispensable trend for Vietnam's electronics industry to

develop in the future.

Source: VIRAC


2.1. Global market– 2.1.3. Network model of production in the electronics industry


PURPOSE

32

2 . Industry overview

2.1. Global market – 2.1.4 Methods of producing electronic components

➢ PCBA (Printed Circuit Board Assembly)

➢ EMS (End Manufacturer Sevices):

➢ OEM (Original Equipment Manufacture)

➢ ODM (Original Designed Manufacture)


PURPOSE

33

Total production value has increased sharply since 2012, but there are signs of

slowing down since 2016. Semiconductor equipment accounts for a large share of

global electronic components production, which is in surplus situation and falling in

demand.

Sources: VIRAC, JEITA, SIA

• The semiconductor industry contributes over 50% of the structure of production

value of electronic component industry in the period of 2010-2017.

Sources: VIRAC, JEITA

Billion USD

Billion USD


2.1. Global market – 2.1.5 Production and consumption


PURPOSE

Production value of semiconductor equipment worldwide,

2010 – 2018f

Structure of global electronic components production by type,

2017e

34

• Over the past two decades, industrialized nations have turned to

manufacture low and middle integrated electronic components in

developing countries through foreign investment to establish facilities.

Growth rates of the global electronics industry from

2016-2018f

Sales of semiconductor devices by type of products, 2017e




PURPOSE

Source: VIRAC, SIA

Source: VIRAC, Statista.com

35

Sale of semiconductor devices by month, 2015 - 2017

Sources: VIRAC, WSTS.

Million USD




PURPOSE

Sale of semiconductor devices by type, 2017e

Source: VIRAC, Statista.com

36

Input price (aluminum, copper, iron) for electronic

components, 2012 – 3/2018

Sources: VIRAC, Worldbank

USD/mt USD/dmtu

Input price (gold, silver, palladium) for electronic components,

2012 – 3/2018

Sources: VIRAC, Worldbank

USD/troy oz USD/troy oz

Prices of important input materials for producing

electronic components in 2017 tend to be reversed and sharply increased.




PURPOSE

37

Sources: VIRAC, UncomtradeSources: VIRAC, Uncomtrade

Billion USD

Import value of electronic components in the world, 2012 - 2016Market share of some typical HS codes, 2012 - 2016

Global demand for electronic component industry continues to increase in the period 2010-2014, but the pace in 2014-2016 is slower due to the impact of

the global economic depression, affecting the demand for electronic products such as telephone, computer.


2.1. Global market – 2.1.6 Import and export


PURPOSE

38

HS code Name of the products

Import market of electronic components in the world, 2017

Sources: VIRAC, Uncomtrade

China is the world's leading importer of electronic components, accounting for

28.3% of the structure in 2016.


2.1. Global market – 2.1.6 Import and export


PURPOSE

39


2.1 Global market- 2.1.7 Situation of production and consumption in some typical countries

In the past decade, China and India have been considered the

world's factories, but in recent times before Vietnam's participation, multinational corporations are considering relocating factories to this country to take

advantage of cheap labor and investment trade incentives.

Semiconductor market revenue of the major manufactueres

worldwide, 2014-2018fBillion USD

Electronic Components Market of the United Sates

Source: VIRAC, Semi.org

40

Structure of electronic components production in Japan in 2017


Electronic Components Market of Japan

Electronic component market has shown signs of recovery since 2013

along with the recovery of electronics industry generally in Japan.

Production value of electronic components in Japan, 2010 - 2017




PURPOSE

Nguồn: VIRAC, JEITA

Nguồn: VIRAC, JEITA

41

• With the world's leading advanced technology, huge investments in information technology and growing demand for environmentally-friendly, fuel-

efficient equipment, etc. Japan's semiconductor industry is well-developed, accounting for over 50% the production value of the whole electronic

component industry.


Billion Yen


Export – import of electronic components of Japan, 2010 – 2017 Structure of import and export for integrated circuit

of Japan, 2010 – 2017




PURPOSE

42

Electronic Components Market of China

With the advancement of information technology, China is known as one of the world's electronics manufactories including DVD players, televisions,

computers, etc. Electronic components made in China are mainly products with medium or low value.

Trillion CNY

Sources: VIRAC, NBS

Revenue of Electronic Components Industry in China,

2011 – 2016e




PURPOSE

43

• China is currently increasing its semiconductor manufacturing and the capacity of manufacturing capacity, buying more equipment, but most of its

facilities are for Light-Emitting Diodes (LEDs) rather than integrated circuits (ICs).

Billion CNY

Sources: VIRAC, NBS

Manufacturing Integrated Circuits of China, 2010 - 2017




PURPOSE

44

Electronic Components Market of South Korea

Korea is the fourth largest importer of semiconductors in the world and the second largest semiconductor producer in the world after the United States.

Production value and export - import of electronic components of Korea,

2014 – 2016e

Sources: VIRAC, Statista

Production and export in 2015 are all lower than previous years.

Sources: VIRAC, Dramexchange

2014 2015 2016e Đơn vị tính

Production

Import

Export

Market share of DRAM revenue, 2015 - 2017




PURPOSE

45

Electronic Components Market of Taiwan

Therefore, the biggest competitive advantage of Taiwanese

manufacturers comes from the large scale production, but the cost of production is much smaller than that of competitors and in the production process

requires high accuracy, which makes the error in the process very low, so the rate of product elimination is not high.

Sources: VIRAC, ITA

Bilion USD Billion USD

Sources: VIRAC, ITA

Market and production value of electronic components in

Taiwan, 2014 – 2017fExport and import electronic components of

Taiwan, 2014 – 2017f




PURPOSE

46

Rank in 2016 Rank in 2017 ManufacturerRevenue in 2016

(million USD)

Revenue in

2017(million USD)

Growth rate of

2016-2017 (%)

Market share in

2017 (%)

List of the 10 largest global semiconductor vendors in revenue, 2016-2017

Nguồn: VIRAC, Telecomlead

According to Gartner, revenue growth for the top 10 global semiconductor vendors reaching 21.6% in 2017 is due to:


2.1 Global market - 2.1.8 Leading companies in the industry


PURPOSE

47

%Tablet PC sales in the world, Q1/2017-Q1/2018

Million tablets

Sources: VIRAC, IDC




PURPOSE Market share of tablet manufacturers in Q1, 2017-2018

Sources: VIRAC, IDC

48

Million computers %

Market share of PC manufacturers, Q1/2018

Sources: VIRAC, IDC

• By 2017, the global PC market has continued to decline PC sales in the world, Q1/2017-Q1/2018

Sources: VIRAC, IDC




PURPOSE

49

Smart phones sales on the world in Q1, 2017-2018

Sources: VIRAC, IDC

Million phones %




PURPOSE

Structure of smart phones by product line Q1/2018

Nguồn: VIRAC, PhoneArena

50

Content

2 Industry overview

2.1 Global market

2.2 Vietnam market

2.3 Industry risks



• Most of these factories produce household electronics, making joint venture with

Japanese companies such as Sony, National, Sanyo, etc. and some small repairing enterprises. These factories together with some factories in the North

formed the nascent electronics industry of Vietnam at this time.

51


2.2. Vietnam market– 2.2.1. History of industry establishment and development


PURPOSE

52

Value chain of electronics industry

Sources: VIRAC collected

•

With simple assembly work,

Vietnam's productivity in electronic products now

accounts for an average of 5-10% of the product value


2.2. Vietnam market – 2.2.2. Value chains in electronics industry - Vietnam's position in the electronic supply chain


PURPOSE

53

• The locally-made electronic components are growing, but underdeveloped, the localization rate of electronic products is very low, on average 13%,

which are mainly packages with plastic and simple metal parts

Sources: VIRAC collected

The localization rate of Japanese electronics companies in some countries, 2015


2.2. Vietnam market – 2.2.2. Value chains in electronics industry - Localization rate of Vietnam electronics industry


PURPOSE

54

• Vietnamese enterprises have not yet provided specific electronic parts for the electronics industry.

Global value chain of Sam Sung and Vietnam

Sources: VIRAC tổng hợp


2.2. Vietnam market – 2.2.2. Value chains in electronics industry - Localization rate of Vietnam electronics industry


PURPOSE

55

No. Problem Main assessment

Requirements of multinational corporations for components vendors• According to the standard of modern production management,

the competitiveness of the components and accessories depends

on three basic factors: quality, cost and delivery time (QCD).

Sources: VIRAC, SIDEC

• Causes of the weakness of the electronic components industry in Vietnam:


2.2. Vietnam market – 2.2.2. Value chains in electronics industry – The reasons why Vietnamese enterprises remain outside the supply chain


PURPOSE

56


2.2. Vietnam market – 2.2.3. Production technology

• Today, Surface Mount Technology (SMT) is the most widely used technology in the electronics manufacturing industry.

• In general, the process of mounting components onto the circuit board using SMT technology consists of four basic steps:


PURPOSE

57

• In Vietnam, SMT technology only started in electronics industry in

2008.

• Vietnam's electronic component manufacturers are mainly using

Japanese, Korean and Chinese technology machinery.


The origin of machinery and technology used in the spare parts

and component industry in Vietnam, 2016

Applying modern management tools and standards to the

manufacture of spare parts and component in Vietnam, 2016



2.2. Vietnam market – 2.2.3. Production technology/Machinery


PURPOSE

58

•

At present, Vietnamese

enterprises mainly import discrete electronic components or basic

components for assembly into specialized components, but not able

to produce a complete electronic components.

Metal in some electronic components

Weight

Component Iron (%)Aluminum

(%)

Copper

(%)

Silver

(ppm)

Gold

(ppm)

Palladium

(ppm)

Value

Component Iron (%)Aluminum

(%)

Copper

(%)

Silver

(ppm)

Gold

(ppm)

Palladium

(ppm)

Sources: VIRAC


2.2. Vietnam market – 2.2.4 Input material


PURPOSE

59

• However, the production of auxiliary products in general and

electronic components in particular is not encouraged.Sources: VIRAC, SIDEC


Billion VND

Production value of electronics component industry, 2011 – Q1/2018e

Production structure of the electronics

industry by type, Q1/2018


2.2. Vietnam market – 2.2.5 Production


PURPOSE

%

60

• According to a report by the Ministry of Industry and Trade, the Index-

Industry Products of electronic components in Q1/2017 fluctuated.

• Supporting industries, components production in Vietnam has not

developed because this is a sector that requires large capital investment

Nguồn: VIRAC, SIDEC

Sources: VIRAC , GSO

Monthly Index-Industry Products of electronic component industry,

2016 – Q1/2018(Calculated by original year 2010)

Supply structure of electronic components in 2015




PURPOSE

61

Sources: VIRAC, GSO

Name of the components Đơn vị 2010 2011 2012 2013 2014 2015 2016 2017 3T/2018e

Production of electronic components in Vietnam, 2010 – 3T/2018e

• The production of electronic components increased sharply with the participation of many large electronic corporations, Vietnam electronics industry

in general and supporting industries in particular will continue to attract a large number of enterprises.




PURPOSE

62

Sources: VIRAC, GSO

Production of mobile phones over the months, 2016-2018

Million phones

The structure of phone production in Vietnam is concentrated in Bac Ninh

and Thai Nguyen.

The structure of phone production in Vietnam by region, Q1/2018

Sources: VIRAC, GSO

Million phones




PURPOSE

63

Name of products Unit Made in 2017

Nguồn: VIRAC, GSO

Production of some types of computers, electronic products and components by region, Q1/2018


PURPOSE



64

According to primary data from the General Statistics Office, in Q1/2018, output of various types of electronics and components reached a high level.




PURPOSE

65

• In the past few years, instead of being taken over, many Vietnamese companies

have done the opposite things, which is spending money to own foreign

enterprises, typically Duc Long Gia Lai Group.

Sources: VIRAC, GSO

Sources: VIRAC, GSO

Number of enterprises and laborers in the electronic components

industry, 2010 - 2016

Classification of electronic components businesses by region, 2016




PURPOSE

66

Sources: VIRAC, GSO

Sources: VIRAC, GSO

• The revenue of electronic components enterprises has been growing

continuously over the years due to the expansion of production activities of

domestic and FDI enterprises. At the same time, the consumption market

has been extended to many countries and areas.

Trillion VND

Trillion VND

Revenue and profit of electronic components business, 2010 - 2016

Total investment capital and fixed assets of

electronic component industry




PURPOSE

67

Product name UnitProduction

locationJan-Feb/2018 Compared to the same period (%)

Some FDI projects invested in electronic components industry, Jan – 2018

Source: VIRAC




PURPOSE

68

• The proportion of smartphone users compared to regular phones in major

cities tends to increase steadily between 2012 and 2017.

Sources: VIRAC, GSO

Million USD

Consumption of electronic component, 2010 – Q1/2018e

Sources: VIRAC, Nielsen

Rate of using smart phones in Vietnam by region, 2017


2.2. Vietnam market – 2.2.6 Consumption


PURPOSE

69

Source: VIRAC

• In the top 10 enterprises have the largest revenue of electronic component

industry, there is no contribution of domestic enterprises but they are from

FDI enterprises of Korea, Japan, etc.


Billion VND

Major customers of electronic components industry, 2015

Top 10 largest electronic component enterprises in revenue of 2016




PURPOSE

70

Product name UnitProduction

location

Jan-

Feb/2018Compared to the same period (%)

Consumption some types of computers, electronic products and components by region, Jan – Feb/2018

Source: VIRAC




PURPOSE

71

• Multinational corporations specializing in the manufacture of electronic

products also have a high demand for electronic components.


No. Name of component Material, technology Amount/month

1

2

3

4


Demand for electronic components of Canon Vietnam

Demand for electronic components of Intel

Direc

Indirect




PURPOSE

72


2.2. Vietnam market – 2.2.7 Import and export – Types of phone and components


• Phone and component exports in Q1/2018 reached 45.27 billion USD,

• In Q1/2018, exports of phones and components to most of the

markets have an increasing turnover, while there are 10 markets have

export turnover decreased compared to the previous year.

Exports of all types of phones and components of Vietnam

through months from 2016 to 2018


Billion USD

Structure of phone and component export market, Q1/2018


PURPOSE

73


%Million USD

Vietnam's cell phone and its components exports, Jan – Feb/2018

Market share of smart phone in EU, Q1/2018


Million USD %

In the first two months of 2018, Viet Nam exported cell phones with total

turnover of 29.76 billion USD,

In the first two months of 2018, the total export turnover of phone

components in Vietnam reached over 15.5 billion USD,




PURPOSE

74

In the coming time, Vietnam's phone exports will face

more challenges, especially in Southeast Asia market

No. Company name

Top 20 enterprises export all types of phones and components with

the highest turnover rate, Q1/2018





PURPOSE

75

Sources: VIRAC, Uncomtrade, GDVC

Imports of phones and component,

2010 – 3T/2018eMillion USD

• In terms of import from the FDI enterprises

• By the end of Q1/2018, import turnover of phones and components of

Vietnam from China has reached the highest level,


Supply market structure of phone and phone components to

Vietnam, 3T/2018




PURPOSE

76


Imports of phones and components, Jan – Feb/2018

Million USD

No. Company name

Top 20 enterprises import all types of phones and components with

over 10 million USD of turnover, Q1/2018


Vietnam mainly imports phone components from South Korea, China and

Hong Kong


PURPOSE



77

By the end of Q1/2018, export turnover of computers, electronic

products and components has reached 25.94 billion USD,


Export structure of computers, electronic products and

components by enterprises of Vietnam, Q1/2018

Exports of computers, electronic products and components of

Vietnam, Q1/2018


Billion USD %


2.2. Vietnam market – 2.2.7 Import and export – Computers, electronic products and components


PURPOSE

78

• Export turnover of computers, electronic products and components of Vietnam to China in 2018 reached


Top 10 export markets of computers, electronic products and

components of Vietnam, Q1/2018e

Unit: Million USD

Top 10 export items with the highest FDI, Q1/2018e





PURPOSE

79


Type of main export computers, electronic products amd components ,

Q1/2018eTop 15 enterprises export computers, electronic products and

components with high turnover, Q1/2018





PURPOSE

Product nameQ1/2018

(million USD)

Compared to the

same period in

Q1/2017 (%)

Proportion

(%)

No Enterprise’s name Market share

80

Imports of computers, electronic products and components of Vietnam over the months, 2017-2018


Billion USD

•




PURPOSE

Import structure of computers, electronic products and components by enterprise

in Vietnam, Q1/2018


81

Top 10 markets supply computers, electronic products and components of Vietnam, Q1/2018


• Imports of computers, electronic products and components from the South Korean market in Q1/2018 reached




PURPOSE

82

Types

In 2018

(Million

USD)

Compared

to the

same

period in

2017(%)

Proportion

in 2018(%)

No. Company name

Top 15 enterprises import computers, electronic products and

components with high turnover, Q1/2018Imported computers, electronic products and components, Q1/2018

Sources: VIRAC, GDVC Sources: VIRAC, GDVC




PURPOSE

83


2.2. Vietnam market – 2.2.8 Analysis of business activities by regions

Hung Yen


PURPOSE

84

Bac Ninh




PURPOSE

85

• SamSung Display Vietnam has adjusted their investment capital by increasing 2.5 billion USD in Bac Ninh


PURPOSE



86

Vinh Phuc




PURPOSE

87

Hai Phong


PURPOSE



88

Thai Nguyen




PURPOSE

89

Content

2 Industry overview

2.1 Global market

2.2 Vietnam market

2.3 Industry risks



90

Risks in terms of raw materials

Risks in terms of safety of labor hygiene


2.3. Industry risks


PURPOSE

91

Risks in terms of environment

Risks in terms of policies


PURPOSE


2.3. Industry risks

92

Risks in terms of competitiveness

Risks in terms of increasing labor cost

Region

2018Compared to

2017 (%)Million VND USD

I

II

III

IV

Minimum wage by regions in Vietnam from January 1, 2018

Nguồn: VIRAC, MOIT


2.3. Industry risks


PURPOSE

93

Strengths Weakness

Opportunities Threats


2.3. Industry risks


PURPOSE

94

Content

2 Industry overview

2.1 Global market

2.2 Vietnam market

2.3 Industry risks



95

On January/18th/2017, the Prime Minister has issued Decision No. 68 / QD-TTg on Supporting Industry Development Program from 2016 to 2025.


2.4. Industry development planning


PURPOSE

96

• Specifically for electrical and electronic component sector:




PURPOSE

97

Until 2020




PURPOSE

98

Until 2030




PURPOSE

99

Content

2 Industry overview

2.1 Global market

2.2 Vietnam market

2.3 Industry risks




2.5 Outlook and forecasts – 2.5.1 Driving forces for industry development

100

From the general situation of electronic components industry in the world


PURPOSE

101

From geographic location and population of Vietnam


PURPOSE



102

From the Government of Vietnam

From the potential demand of the domestic marketNumber of smart phones and function phones, 2013-2019e

Sources: VIRAC, GfK

Million phones




PURPOSE

103

•

Thus, the domestic market

has a huge growth potential for e-businesses, thereby boosting

electronic production, which is the driving force for the electronics

manufacturing industry. Sources: VIRAC, GfK

Billion VND

Revenue of domestic electronics technology groups, Q1/2018

Sources: VIRAC, GfK

Trillion VND

Revenue and growth of electronics market in Vietnam,

Q3/2014 – Q1/2018




PURPOSE


2.5 Outlook and forecasts– 2.5.2 Forecasting industry outlook

104

Forecasting development of output sector - electronics industry:

Forecasting demand of electronic components industry:

No. Products Demand in 2020



PURPOSE

105

Content

3 Enterprise analysis

3.1 Introduction of enterprises

3.2 Financial analysis

106


3.1. Introduction of enterprises


PURPOSE

107




PURPOSE

108




PURPOSE

109

Content


3.1 Introduction of enterprises

3.2 Financial analysis

110

• Most of the companies in the group have sales growth in 2016

compared to 2015

• Gross profit margin of the enterprises in the group is very low.

Billion VND

Source: VIRAC

Sources: VIRAC

Net revenue from sales and services, 2015 - 2016

Billion VND

Gross profit and gross profit margin of enterprises, 2016


3.2. Enterprise analysis


PURPOSE

111

Enterprises Cost of salesEnterprise cost

management

Net

revenue

Cost of

sales/net

revenue

ECM/net

revenue

Foster Electric

Vietnam

Doosung Tech

Vietnam

Hosiden Vietnam

Intel Products

Vietnam

Saigon STEC

Sumiden Vietnam

Meiko Vietnam

Haesung Vina

Cost of sales and enterprise cost managementUnit: Billion VND

Billion VND

Source: VIRAC

Source: VIRAC

Asset structure, 2016




PURPOSE

112

• Capital structure of most companies in the group is paying debt,

mainly borrowing and short-term debt. Billion VND

Source: VIRAC

Source: VIRAC

Capital structure, 2016

Solvency, 2016




PURPOSE

113

ROS ROA ROE

Profit-

after-tax

(billion

USD)

Net

revenue

(billion

USD)

Average

owner’s

equity(billion

USD)

Total average

asset (billion

USD)

Foster Electric

Vietnam

Doosung Tech

Vietnam

Hosiden

Vietnam

Intel Products

Vietnam

Saigon STEC

Sumiden

Vietnam

Meiko Vietnam

Haesung Vina

Source: VIRAC

Source: VIRAC

Indicators of performance assessment, 2016

Efficiency of asset using, 2016




PURPOSE

114

Content

4 Appendix of financial statement

115

APPENDIX

Saigon Stec Co.,Ltd

Indicators 2016 2015

1. Revenue for sales and services

2. The deduction from revenue

3. Net revenue from sales and services

4. Cost of goods sold

5. Gross profit

6. Revenue from financial activities

7. Financial cost

- Interest expenses

8. Cost of sales

9. Enterprise cost management

10 Net profit from business activities

11. Other incomes

12. Other costs

13. Other profits

14. Gross profit before tax

15. Current corporate income tax

16. Deferred corporate income tax

17. Profit after corporate income tax

BUSINESS RESULTSUnit: VND


TÀI SẢN

A. CURRENT ASSETS

I. Cash and cash equivalents

II. Short-term investments

III. Short-term receivables

1. Accounts receivable of customers

IV. Inventories

V. Other current assets

B. NON-CURRENT ASSETS

I. Long-term receivables

II. Fixed assets

III. Investment in real estate

V. Long term financial investment

V. Other non-current assets

TOTAL ASSETS

C – LIABILITIES

I. Short-term liabilities

1. Short-term payables for suppliers

II. Long-term liabilities

D – OWNER”S EQUITY

I. Owner equity

II. Other funds

TOTAL EQUITY

BALANCE SHEETUnit: VND


I. Cash flows from business activities

II. Cash flows from investment

III. Cash flows from finance

Net cash flows during the year

Cash and cash equivalents at the beginning of the year

Impact of exchange rate changes in foreign currency

Cash and cash equivalents at the end of the year

CASH FLOW STATEMENTUnit: VND


PURPOSE

116

APPENDIX

INTEL PRODUCTS VIETNAM CO., LTD






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

117

APPENDIX

Foster Electric Vietnam co. ltd






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

118

APPENDIX

Hosiden Vietnam co. ltd






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

119

APPENDIX

Haesung Vina co. ltd






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

120

APPENDIX

Meiko Vietnam co. ltd






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

121

APPENDIX

Hanoi Doosung tech co. ltd






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

122

APPENDIX

Sumidenso Vietnam co. ltd






5. Gross profit


7. Financial cost

- Interest expenses

8. Cost of sales



11. Other incomes

12. Other costs

13. Other profits







TÀI SẢN

A. CURRENT ASSETS





IV. Inventories




II. Fixed assets




TOTAL ASSETS

C – LIABILITIES





I. Owner equity

II. Other funds

TOTAL EQUITY












PURPOSE

108

Report Disclaimer

Report Disclaimer

This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification. VIRAC has

produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from sources we believe to be

reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the document and its contents, information and

materials. The content found in this report is proprietary to VIRAC and is provided solely for your personal and non-commercial use. You agree that you will not use

this report for any purpose that is unlawful and that you will not reproduce the report or redistribute it outside your organisation, or place it on a website for public

access without the express written permission of VIRAC.

SHOULD YOU NEED ANY ASSISTANCE, PLEASE CONTACT US:

VIETNAM INDUSTRY RESEARCH AND CONSULTANCY (VIRAC JSC.,)

6th Floor, Anh Minh Building, 36 Hoang Cau, O Cho Dua, Dong Da, Hanoi, Vietnam

Website: http://virac.com.vn/

Email: [email protected] | Tel: +84 463289520

http://virac.com.vn/

mailto:[email protected]

Thank you !

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