Vietnam firms move up value chain, join global supply networks

Nguyen Trong Dang, director of precision engineering firm Viet Nguyen, said his company entered the semiconductor supply chain after securing orders in 2013 to produce components for chip testing equipment used in Apple iPhone production.

Dang founded his business in 2011 after working for a U.S. company, starting with limited capital and small repair jobs before investing in machinery to meet more complex orders.

The company's revenue grew from about VND3 billion (US$113,826) in 2016 to VND20 billion ($758,842) in 2020, before reaching about ten times of that in 2025, he said.

Its factory expanded from 200 square meters to 6,000 square meters.

Viet Nguyen now produces about 60 percent of components used in chip testing machines and supplies aviation parts, including cabinet components, to companies such as Safran and Boeing, Dang said.

Do Hoang Trung, founder and chief executive of automation firm IDEA Group, said Vietnamese companies are also developing high-end manufacturing capabilities, including robotics and automated production systems.

IDEA Group designs and produces automation lines, robots and autonomous vehicles, exporting to markets including Japan, the United States, Canada, India, and Australia, Trung said.

The company invests about 30 percent of its annual expenditure in research and development to build domestically designed products, he said.

During the COVID-19 pandemic, IDEA developed an automated inspection system for a Japanese electric motor manufacturer in Vietnam, reducing inspection time from five minutes to two minutes per unit and improving defect detection rates by 30 percent, according to Trung.

Nguyen Ngoc Thinh, director of wire manufacturer Tien Thinh, said his company joined supply chains of multinational firms operating in Vietnam such as Toyota, Honda, Toshiba, Brother and GE after upgrading production standards.

Thinh said it took about six years for the company to meet international certification requirements to supply Techtronic Industries, a global power tools manufacturer.

"Joining the global supply chain is a challenge, but we have secured orders that create a foundation for further growth," he said.