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How to export semiconductors, phones and accessories from VN

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Vietnam is emerging as a powerhouse in the global manufacturing landscape, poised for a remarkable surge in economic prosperity over the coming decade, according to analysts in a report by CNBC. This ascent is anchored by various factors. 

For one, Vietnam's strategic geographical positioning adjacent to China and its proximity to vital maritime trade corridors have been instrumental in transforming it into a magnet for international investment. Coupled with competitive labour costs and a robust infrastructure tailored for export efficiency, the country is fast becoming a preferred destination for manufacturing operations on the global stage.

Then, of course, there is its burgeoning electronics industry, particularly in producing and exporting electrical products, phones, and accessories. 

As a manufacturing hub for major global brands, producing smartphones, and more, Vietnam's role in the international economy is increasingly significant, providing essential employment opportunities and driving economic progress. For example, Vietnam's semiconductor industry, in particular, has seen exponential growth, emerging as the third-largest chip exporter to the United States. Because of this, based on reports published on Channel News Asia (CNA), February 2023 alone witnessed a staggering 75% year-on-year revenue increase, totalling US$562 million. 

While this growth spurt might be fueled by the shifting dynamics of the US-China trade relations, it underscores Vietnam's potential to become a dominant force in the global semiconductor arena. 

Now, with mobile phones and their components accounting for a significant portion of approximately 21% of Vietnam's exports, according to Trading Economics, the importance of these products cannot be overstated. Similarly, the same can be said about the importance of optimising exporting practices, including adherence to international customs regulations, to sustain growth in the global market.

Looking into the consumer electronics market in Vietnam

As mentioned, Vietnam's economic narrative in recent years has been significantly shaped by its manufacturing sector. As a matter of fact, it has emerged as a cornerstone of its Gross Domestic Product (GDP), contributing over 20% to its economic output, according to McKinsey & Company. 

This sector's vitality was particularly evident during global instability, such as the COVID-19 pandemic. Despite these challenges, Vietnam's GDP growth impressively accelerated to an 8% growth rate in 2022. This economic steadfastness can be attributed to the harmonious blend of advanced manufacturing sectors like smartphones, electronics, and their components alongside traditional industries.

Key players and manufacturers of the consumer electronics market

The semiconductor, phones, and accessories industries have been taking the lead in attracting Foreign Direct Investment (FDI) into Vietnam, drawing major international corporations to its shores. 

For instance, when it comes to Vietnam's semiconductor market, Intel set a precedent by establishing a significant part of its chip-making operations in Ho Chi Minh City, which has since dispatched three billion semiconductor products globally. Following Intel's lead, global giants such as Samsung, Qualcomm, and more have made substantial investments in Vietnam. The late 2010s even saw the emergence of domestic firms like Viettel within the semiconductor sphere, further enriching the industry's landscape. 

Due to all of this, by 2024, the valuation of Vietnam's semiconductor industry is anticipated to reach US$6.16 billion, as claimed by CNA. Reports by technavio further support this, claiming that Vietnam's semiconductor market is projected to reach US$7.01 billion by 2028. This highlights its rapid growth and the increasing confidence of both international and local players in the Vietnamese market.

Additional drivers of Vietnam’s electronics sector expansion

Sure, Vietnam's rising prominence in the global consumer electronics scene can be attributed to its strategic location and low-cost labour. However, equally crucial are the country's robust technological capabilities and the supportive framework established by the government to nurture industry growth.

A key element fueling this development is Vietnam's rich pool of technology talent, especially in areas like software development and IT services. Recognising the potential, the Vietnamese government has strategically prioritised electronics, information, and telecommunication technologies as critical sectors for development within its industrial strategy for the 2025-2035 period.

This forward-looking approach is complemented by a suite of government policies and incentives designed to attract and retain investment in the high-tech sector. For example, initiatives such as the creation of specialised industrial zones have been instrumental in fostering a conducive environment for the manufacturing industry. 

The Vietnamese government's commitment to enhancing the country's investment appeal is further made evident in its comprehensive incentive programmes. These include offering a reduced rate of corporate income tax over certain periods or for the duration of a project, which significantly lowers the operational costs for foreign-invested enterprises. 

Additionally, exemptions or reductions in import duties and taxes for goods brought in as fixed assets, raw materials, supplies, and parts for projects further alleviate financial burdens. Moreover, favourable policies concerning land rents and levies, such as reductions or exemptions, provide a financial respite to businesses, making Vietnam a prime target for foreign direct investment within the consumer electronics domain.

Through these concerted efforts, Vietnam is not just maintaining its competitive edge but is actively enhancing its stature as a global manufacturing powerhouse, particularly in the high-stakes domains of semiconductors, phones, and related accessories.

Global demand for semiconductor, phones and accessories

But why is Vietnam so actively taking steps to maintain its competitive edge?

Taking a step back, it is clear that the global appetite for semiconductors, phones, and accessories has surged. 

Why, you ask? 

Because it's an inevitable result of riding the wave of digital transformation, which has become ubiquitous in both personal and professional realms. 

So, how much has the semiconductors market been impacted by the pervasive impact of digital technologies and mobile connectivity?

Semiconductors, the backbone of modern technology, have seen their markets flourish dramatically, with sales soaring to approximately US$600 billion back in 2021, marking a growth of over 20%, according to McKinsey & Company. Looking ahead, as semiconductors continue to embed into the fabric of our daily lives, industry forecasts by McKinsey & Company anticipate a robust annual growth rate of 6 to 8% leading up to 2030, underscoring the semiconductor sector's pivotal role in the global economy. Furthermore, a study by the Semiconductor Industry Association and the Boston Consulting Group projects a 56% increase in the global demand for semiconductor manufacturing capacity by the end of 2030.

Now, Vietnam, with its growing prominence in the electronics manufacturing sector, is strategically positioned to cater to this expanding global demand. And as the country continues to advance its semiconductor, phones, and accessories industries, the focus shifts to how it addresses the demands of global markets.

Import destinations for Vietnamese semiconductors, phones and accessories

By now, it should be clear that electronics is one of the main leading commodities in Vietnam's export economy. In fact, according to Vietnam Briefing, by June 2023, a large portion of the nation's exports, amounting to US$12.3 billion, comprised computers, electrical products, telephones, mobile phones, and their components, alongside machinery and tools. 

In addition, the United States of America (USA), China, and Japan stand out as the top recipients of Vietnam's exports. Notably, the USA leads the pack, with its import volume from Vietnam almost doubling that of China, its nearest competitor, and quadrupling the intake by Japan. Specifically, for mobile phones manufactured in Vietnam, China, the USA, and Korea are the primary markets, while for broader electronics, the USA, China, and Hong Kong top the list.

Consider the market characteristics and trade agreements of each key export destination to understand why certain products thrive in these significant international markets:

Country

Market characteristics

Trade agreements and partnerships

USA

The increasing global demand for chips has spurred countries, including the USA, to enhance investments in semiconductor production and innovation.

The implementation of the CHIPS Act in 2022 signifies a pivotal move towards bolstering a more robust, secure, and enduring semiconductor ecosystem globally. This initiative seeks to foster new investment opportunities and nurture the expansion of technical expertise within the USA and beyond

South Korea

South Korea's semiconductor industry has recently seen its most significant gains in production and shipments, indicating a technological resurgence poised to positively influence both the national and global tech landscapes.

The Vietnam-Korea Free Trade Agreement (VKFTA) has unlocked numerous benefits for Korean investors in Vietnam, thanks to preferential tariffs and streamlined bureaucratic processes, enhancing the affordability and efficiency of importing electronic components and fostering supply chain diversification.

Japan

Japan's market is anticipated to navigate through cyclical trends influenced by the current geopolitical tensions, energy challenges, and economic fluctuations. The forecast by Statista suggests that after the temporary dip in 2023, it will be followed by a robust recovery and growth phase in the years ahead.

Japan stands as Vietnam's most engaged trading partner in terms of bilateral and multilateral Free Trade Agreements (FTAs), fostering a solid foundation for deepened trade collaboration. Notable agreements like the ASEAN-Japan Comprehensive Economic Partnership (AJCEP), the Vietnam – Japan Economic Partnership Agreement (VJEPA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP) significantly enhance trade, investment, and bilateral relations, ensuring mutual benefits for both nations.

Navigating logistics and customs for smooth export operations

For enterprises aiming to make their mark in the international electronics sector, understanding the intricacies of international shipping is paramount. And since the journey of shipping electronics internationally involves meticulous planning, adherence to these specific protocols is a must to ensure your semiconductors, phones and accessories are delivered safely and efficiently to their global destinations.

1. Taxes and duties

Navigating the landscape of taxes and duties is a critical aspect of exporting electronics. 

A strategic approach involves utilising FTAs prevalent in the region. This is because FTAs can significantly reduce or even eliminate certain tariffs, making your electronic products more competitive in international markets. By understanding and applying the specific provisions within these agreements, exporters can optimise their cost structures, enhancing the global reach of their high-value semiconductors, phones, and accessories. This not only opens up new markets but also fortifies existing trade relationships, offering a clear pathway to expanded business opportunities.

2. Shipping documents

For the successful international shipment of electronics, a comprehensive set of documents is essential. 

The general checklist for exporting goods from Vietnam includes an Electronic Export Customs Declaration, Bill of Lading, Contract, Certificate of Origin, Commercial Invoice, Customs Export Declaration Form, Export Permit, and Technical Standard/Health Certificate. These documents ensure compliance with both the exporting country's regulations and the import requirements of the destination country.

However, to dodge customs clearance issues, do note that the specific requirements can vary significantly depending on the destination. For instance, shipping from Vietnam to Singapore or Japan necessitates adherence to their unique regulatory frameworks and documentation standards. 

Consider the following:

Country

Shipping documents required

Singapore

  • Air Waybill: Includes detailed descriptions and accurate values of goods, matching the commercial invoice.
  • Commercial Invoice: Details all costs, including goods value, freight, insurance, and packaging, endorsed with Incoterms on the supplier's letterhead.
  • Packing List: Provides detailed, itemised descriptions of the products being shipped.
  • Customs Declaration: Comprises the commercial invoice, export declaration, and any required export authorisation or license.
  • Permits, Licenses, Certificates: Necessary documentation that should be provided in copies with originals presented by DHL Express. Importing into Singapore also requires a Customs Import Permit, obtained after registering with the Accounting and Corporate Regulatory Authority (ACRA) or securing a Unique Entity Number (UEN), activating a Customs account, and applying for the permit via TradeNet.

Japan

  • Air Waybill: Acts as the transport label, detailing the shipper and receiver addresses and contact details. Plus, a detailed description of the shipment's contents, together with the package dimensions and weight.
  • Commercial Invoice: Functions as the customs invoice, providing a breakdown of transaction costs, currency code used in the transaction, and the purpose of the export.
  • Additional Documents: Depending on the specifics of your shipment and Japan's import regulations, you might also need import certificates or permits as mandated by Japanese authorities.

3. Packaging

Comprising various components such as transistors, capacitors, diodes, and circuits, semiconductors are particularly susceptible to damage from environmental factors. As such, for businesses exporting electronic goods, meticulous packaging is paramount to safeguard these valuable and delicate items.

Key packaging strategies:

  • Anti-static protection: Equip packaging with anti-static materials to shield sensitive semiconductor devices from static electricity that can cause irreparable damage.
  • Vibration and shock absorption: Utilise cushioning materials like foam inserts to minimise the impact of vibrations and shocks during transit.
  • Moisture barrier: Incorporate electrostatic dissipative bags or desiccants to protect against humidity and moisture, which can lead to corrosion or other moisture-related damages.
  • Temperature control: For shipments sensitive to temperature fluctuations, consider using thermal insulation or temperature-controlled shipping solutions to maintain a stable environment.
  • Layered packaging: Implement a multi-layer packaging approach, using double-walled corrugated boxes and secure sealing methods like H-taping with pressure-sensitive tape to provide comprehensive protection from external pressures.

Explore our electronic goods packaging guidelines for a better idea of the effective methods for safeguarding your semiconductor devices throughout the shipping process.

Streamline semiconductor export with DHL Express

As Vietnam's electronics sector continues to flourish, opportunities for businesses to expand their reach and tap into international markets have never been more promising. 

If you plan to leverage Vietnam's growing prominence in the global electronics industry, partnering with a logistics leader like DHL Express can transform your export operations, offering a seamless path to becoming a trusted international supplier of high-demand electronics. 

DHL Express not only provides express international shipping services that ensure the timely delivery of your products but also offers the expertise needed to navigate various complexities with ease. From tailored packaging solutions like boxes designed specifically for the safe transport of cell phones to being aware of the regulations related to your shipment, we offer personalised guidance and services.

Embrace the opportunity to elevate your business to new heights by creating a DHL Express business account today. Benefit from our comprehensive logistics solutions designed to make your entry into international markets as smooth and efficient as possible.