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Vietnam’s electronics import surge reflects AI demand, production expansion

Vietnam’s electronics import surge reflects AI demand, production expansion

Vietnam’s merchandise imports rose 36.7% in the first nine months of 2026, significantly outpacing export growth as electronics companies increased component inventories and expanded production capacity.

The sharp rise in imports reflects the combined impact of investment cycles, input prices and Vietnam’s growing role in global electronics supply chains, including products related to artificial intelligence.

AI boom drives imports

Vietnam’s merchandise imports reached $453.72 billion in the nine-month period, up 36.7% from a year earlier, according to the National Statistics Office. Exports totalled $434.30 billion, a year-on-year increase of 24.5%, bringing total trade to $888.02 billion, up 30.4%.

The country recorded a merchandise trade deficit of $19.42 billion over the nine-month period, although it posted a surplus of $1.27 billion in September alone.

Foreign-invested enterprises generated $350.41 billion in exports, up 29.4% year-on-year and accounting for 80.7% of the national total. By contrast, exports by domestic companies reached $83.89 billion, rising just 7.5%. The figures indicate that export growth remains heavily concentrated in the foreign-invested sector.

On the import side, foreign-invested firms recorded $335.55 billion, up 42% year-on-year, while domestic businesses imported $118.17 billion, an increase of 23.5%. The gap in growth rates suggests that import demand among foreign-invested businesses, which make up a large share of electronics and high-tech manufacturing, is expanding faster than that of domestic enterprises.

According to the Ministry of Industry and Trade (MoIT), machinery, equipment, raw materials and fuels used in domestic production and export processing account for around 90.5% of total imports.

Pham Van Quan, deputy director of the ministry’s Industry Agency, said the trend should also be viewed in a positive light. He said additional equipment imports could reflect efforts to expand production lines, prepare manufacturing capacity, and meet peak consumer demand at the end of the year.

Investors have assessed Vietnam’s reforms by merging localities, ministries and agencies, improving institutions and cutting administrative procedures, as moving in a positive direction, Quan said.

As a result, they have confidently scaled up production, importing additional equipment and expanding production lines in preparation for the peak consumption season in the fourth quarter. This is a peak period for manufacturing businesses, he added.

Trinh Thu Hien, deputy director of the ministry’s Agency of Foreign Trade, identified three main factors behind the increase in imports, particularly in the electronics and semiconductor sectors.

The first is rising global raw material prices. She said prices of some chips and solid-state drives (SSDs) had increased by 300% to 500%. As a result, even if import volumes remained at the previous year’s level, the value of imports could still rise sharply because of higher prices.

Second, electronics companies are increasing inventories and stockpiling raw materials to meet demand for AI-related products. Some materials have become scarce, with supply shortages occurring at times, prompting certain factories and companies to extend inventory coverage from around six weeks to 12 weeks. Meanwhile, the inventory value of some businesses has risen from $100 million to $700 million.

The third factor is production expansion by electronics and semiconductor companies. Hien cited Samsung’s increased investment in Thai Nguyen province, Intel’s relocation of a factory from Costa Rica to Vietnam, and BYD’s expansion and upgrading of its investment in Phu Tho province.

Vietnam benefits from AI supply chains, but domestic value added remains limited

The World Bank Group’s October 2026 East Asia and Pacific Economic Update said the wave of high-tech manufacturing and exports serving AI demand is supporting growth in several economies participating in global supply chains.

The WB raised its forecast for Vietnam’s GDP growth in 2026 by 1.1 percentage points from its previous projection to 7.4%. This was the largest upward revision among economies in Asia and the Pacific.

According to the report, in the 12 months ending in April 2026, six economies - China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam - exported a combined $1.4 trillion worth of AI-related goods. Over the same period, the U.S. imported around $739 billion worth of these products, with approximately one-third originating in East Asia and the Pacific.

Vietnam’s exports of AI-related goods have more than doubled compared with the 2020-2022 average. The country primarily participates in downstream equipment assembly, with computers, servers and routers accounting for around 60% of its AI-related goods exports. A significant share of these exports serves final demand in the U.S.

However, export growth has been accompanied by substantial import demand. According to the WB, Vietnam’s imports grew faster than exports in 2026, partly because companies increased their inventories of electronics, semiconductor prices rose and fuel costs remained high.

This indicates that Vietnam’s technology manufacturing and exports remain closely linked to overseas supplies of components and raw materials.

Alongside the growth opportunities, the WB also highlighted risks if expectations for AI’s economic returns are not met, potentially triggering financial market adjustments and affecting investment.

Franziska Ohnsorge, WB chief economist for Asia, said Vietnam is deeply integrated into AI-related supply chains. If the trend of strong AI demand continues, Vietnam will have significant opportunities to benefit and sustain high growth. However, this is also a risk factor because if the AI trend reverses, Vietnam’s growth could be affected.

Despite strong growth in electronics trade, domestic value added remains limited. According to the government’s assessment in Notice No. 481/TB-VPCP dated September 14, 2026, Vietnam’s electronics industry remains heavily dependent on imported components, raw materials and technology, while domestic companies have limited participation in supply chains.

Following a meeting last month with the Vietnam Electronic Industries Association and several major electronics and semiconductor import-export companies, Standing Deputy Prime Minister Pham Gia Tuc instructed the Ministry of Industry and Trade to work with businesses reporting large gaps between import and export turnover, particularly those with substantial trade deficits. The aim is to clarify the structure and purpose of their imports and the extent to which these imports support production and exports.

The ministry was also tasked with reviewing the list of priority supporting-industry products for the electronics sector, focusing on components and materials with strong demand and potential for domestic production.

Another task is to develop a program to connect and develop Vietnamese suppliers for domestic and foreign electronics, semiconductor and technology firms, based on individual product supply chains, technical standards and business requirements.

At the same time, the government has called for stronger links between foreign-invested enterprises and domestic businesses, alongside support to help Vietnamese companies improve technological capabilities and quality management and participate in higher-value-added, technology-intensive stages of production.

At the MoIT’s regular press briefing, Hien, deputy director of the Agency of Foreign Trade, said the ministry’s measures focused on improving institutional and policy frameworks, developing markets and supporting businesses. In the longer term, the goal is to strengthen the capabilities of Vietnamese enterprises and increase the domestic value added of products manufactured in Vietnam.

Source: Quang Minh, Minh Hue

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Vietnam’s rapid growth reshapes Southeast Asia’s economic rankings: The Nation

Vietnam’s rapid growth reshapes Southeast Asia’s economic rankings: The Nation

Vietnam’s rapid economic growth is reshaping its position in Southeast Asia, with the country projected to overtake Indonesia in nominal GDP per capita in 2026, according to Thailand’s The Nation.

Vietnam’s nominal GDP per capita is forecast to reach US$5,259 in 2026, compared with US$5,153 for Indonesia, potentially placing it fifth among ASEAN economies, the Thai newspaper reported on October 31, citing International Monetary Fund (IMF) projections.

The outlook reflects Vietnam’s expanding manufacturing base, strong export performance and continued foreign investment. The Government has set a target of at least 10% economic growth in 2026, while real GDP grew 9.95% year on year in the third quarter.

Public investment and foreign direct investment (FDI) remain important drivers of the country’s economic expansion. In the first nine months of 2026, disbursed FDI reached US$21.1 billion, up 12% year on year, while registered capital for newly licensed projects rose 76% to US$50.3 billion.

Exports also recorded strong growth, increasing 25% to US$434 billion over the same period, according to figures cited by The Nation. International manufacturers, including Samsung Electronics and Foxconn, have continued to expand their production operations in Vietnam, reinforcing its role in global supply chains.

Mai Fujita, a senior researcher at the Institute of Developing Economies of the Japan External Trade Organization (IDE-JETRO), emphasised the importance of proactive public investment in supporting economic growth. She also highlighted the need to develop human resources and technological capabilities alongside infrastructure to sustain growth over the longer term.

Vietnam is now setting its sights on raising GDP per capita to US$8,500 by 2030, a level comparable to Thailand’s current figure.

Its projected rise in GDP per capita comes as Indonesia continues to expand at a more moderate pace, while Thailand faces slower growth and high household debt. However, nominal GDP per capita rankings are influenced by exchange rates and population size as well as economic performance, and do not in themselves reflect income distribution or living standards.

International forecasts also point to challenges ahead. The International Monetary Fund and the Asian Development Bank project Vietnam’s economy to grow by around 7.5% in 2027, below the Government’s ambition of at least 10% growth in 2026.

The longer-term challenge is therefore to translate rapid expansion into sustained productivity gains and higher incomes. Investment in skills, technology and infrastructure will be crucial to strengthening competitiveness and ensuring that Vietnam’s economic momentum can be maintained.


Vietnam manufacturing growth eases in October as export orders fall

Vietnam manufacturing growth eases in October as export orders fall

The Vietnamese manufacturing sector continued expansion in October, although price increases and supply issues limited growth in some cases.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index ticked up to 52.3 points in October from 51.9 points in September, pointing to a further modest monthly strengthening in the health of the sector at the start of the fourth quarter. Business conditions have now improved in 16 consecutive months.

The overall improvement in operating conditions was limited by slower rises in output and new orders. Total new business rose for the sixth month running, despite falling new export orders weighing on growth. The rate of expansion was solid, but the slowest in the current growth sequence.

Manufacturing production expanded again in October as new orders increased on stronger customer demand. However, growth also eased here, hitting a six-month low. Some respondents said difficulties obtaining raw materials had limited production growth.

Transportation difficulties were evident in data on suppliers' delivery times, which lengthened markedly and to the largest extent since April. Rising fuel prices and poor weather conditions were among the factors leading to transportation delays, according to respondents.

Difficulties importing goods and the use of inputs to support production meant that stocks of purchases decreased solidly, despite sustained growth of input buying as companies made efforts to secure goods to support production.

Rising transportation costs were also central to the latest rise in input prices as higher costs for oil pushed up fuel prices. The rate of inflation quickened for the second month running and was the fastest since June, albeit still well below the spike seen following the outbreak of war in the Middle East. In turn, output prices also increased at a sharper pace, following only a slight rise in September.

Employment fell for the third consecutive month in October, though only slightly, with some firms citing staff resignations. Despite the smaller workforce, slower new order growth and more efficient processing of outstanding work allowed firms to reduce backlogs modestly.

Stocks of finished goods also fell as firms sold warehoused goods to draw down inventories. Post-production stocks decreased markedly, though slightly less than in September.

Optimism about better raw material availability and further improvements in market conditions supported a positive 12-month outlook for production. Sentiment hit an eight-month high but remained weaker than before the war in the Middle East.

Andrew Harker, economics director at S&P Global Market Intelligence said, "Vietnamese firms are battling to maintain growth at present amid headwinds that are making their operations more challenging. New orders continued to rise in October, feeding through to a solid increase in production, but in both cases rates of expansion slowed from September."

"The limits to growth were often due to the international environment. Fuel and transportation costs rose amid higher oil prices, while companies reported difficulties importing and exporting products. While firms are able to maintain improvements for now, they will be hoping for a more conducive environment to growth in the months ahead," he added.


Hanoi issues guidelines on green, circular projects and ESG implementation

Hanoi issues guidelines on green, circular projects and ESG implementation

Hanoi has directed municipal departments to implement government guidelines for classifying green projects, circular economy initiatives, and Environmental, Social, and Governance (ESG) frameworks, paving the way for eligible businesses to access interest rate subsidies.

Mr. Bui Duy Cuong, Vice Chairman of the Hanoi People’s Committee, signed Official Dispatch No. 6035/UBND-NNMT regarding the implementation of Prime Minister Decision No. 46/2026/QD-TTg dated September 17, 2026 (Decision 46).

The decision provides technical guidelines for classifying green projects, evaluating circular economy criteria, and applying ESG criteria.

Under Decision 46, enterprises, business households, and individual business entities executing certified green or circular projects and presenting ESG implementation reports will qualify for interest rate support considerations under applicable regulations.

Under the city’s directive, the Hanoi Department of Agriculture and Environment will serve as the focal agency, collaborating with relevant departments, sectors, and commune-level People's Committees to disseminate the decision.

The department is tasked with guiding the implementation of environmental and agricultural criteria for green and circular projects under its state management scope.

The department must compile the list of projects under the scope of Decision 46 to report to the Ministry of Agriculture and Environment. It will advise the municipal People's Committee on publishing the certified list of green, circular, and ESG-compliant projects biannually on the city's portal on June 30 and December 31.

Additionally, the department will inspect, monitor, and address violations regarding independent evaluation entities operating in agriculture and environment sectors, while supervising project compliance maintenance over time.

Concurrently, the Hanoi Department of Finance is assigned to lead data integration for investment management systems and oversee the implementation of governance frameworks. It will assess financial resources and state budget capabilities according to decentralized authority, alongside mobilizing alternative financial mechanisms to support green and circular programs.

The Department of Finance will also inspect and monitor independent rating agencies and ensure project compliance according to legal auditing and administrative violation frameworks.

The Hanoi Department of Industry and Trade will oversee project implementation across energy, processing, and manufacturing sectors. The department is tasked with promoting resource-efficient, low-emission, and sustainable production models, while evaluating criteria for industrial symbiosis and circular linkages.

The Hanoi Department of Construction will handle projects in construction, urban development, technical infrastructure, and transport, promoting resource-saving materials, low-carbon building technologies, and sustainable urban solutions.

Under Decision 46, a green project must meet specific eligibility requirements across designated sectors. Attached technical appendixes outline requirements for ten energy project categories, three transport categories, two construction categories, three water resource categories, 12 agriculture, forestry, fisheries, and biodiversity categories, six processing and manufacturing categories, and nine environmental service categories.

For circular economy projects, the regulations define eight project groups for circular design and manufacturing, two for circular utilization, five for resource recovery, and four for industrial symbiosis and circular integration.


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