Vietnam’s Electronics Sector has Attracted US$10 bn in FDI Thus Far in 2015, says Country’s FIA

Vietnam’s Foreign Investment Agency has said that the country’s electronics sector has attracted foreign direct investment to the tune of US$10 bn thus far in 2015. The list of investors features global leaders in the electronics sector, such as Panasonic, LG, Foxconn, Samsung, and Intel. The Foreign Investment Agency in Vietnam functions under the aegis of the Ministry of Planning and Investment.

That leading companies are increasingly looking at Vietnam as a lucrative manufacturing base can be gauged from the recent investments made in the Asian country by market leaders. Samsung, for instance, has set up a US$2.5 bn factory in Bac Ninh, which is located about 30 kilometers from Hanoi, Vietnam’s capital. The company has set up another US$2-bn manufacturing unit in Thai Nguyen. While the former facility primarily manufactures feature phones, the latter produces smart TVs, laptops, smartphones, and medical equipment. Samsung also has a US$1 bn plant in Ho Chi Minh City that focuses primarily on the production of LED TVs.

According to Vietnam’s Foreign Investment Agency, the cascading effect of these enormous investments on Vietnam’s economy is massive, as several jobs are created on the sidelines. For instance, when Samsung announced that it had chosen Thai Nguyen for its manufacturing facility, a number of satellite units came up around the area as enterprises wanted to provide auxiliary support to the new set up.

Fuelled by an accelerating rate of FDI, Vietnam’s economy has fared better than many other ASEAN economies in the last couple of years. The Foreign Investment Agency, too, says that Vietnam’s export revenue grew faster than other ASEAN nations. Globally, this has augured well for Vietnam’s standing as the country has risen to rank 12th among the top electronics exporters in the world.

Vietnam’s successful run in the global electronics industry is expected to continue as the country’s government introduces new tax benefits and other attractive policy packages to attract more FDI. It will now be interesting to see how other larger countries in ASEAN react to Vietnam’s strengthening trade position.

India’s Electronics Manufacturing Sector Needs Government Boost to Improve Production Volume, says ESC

Despite India aggressively promoting manufacturing on its shores via Prime Minister Narendra Modi’s pet project, Make in India, the electronics sector in the country has reported that electronics production has fallen short of projections. In view of this shortfall, the Electronics and Computer Software Export Promotion Council (ESC), has appealed to the government to devise policies and frameworks that will help accelerate the electronics manufacturing in India.

According to representatives of the ESC, the rate at which electronics production is progressing in India will make it impossible to reach even half the volume of electronics imports by 2020. Saumen Chakraborty, the chairman of the ESC, said that the total electronics production of India was valued at US$31 bn in 2014-2015. The estimations, however, were rather ambitious: US$70 bn for this period. He also said that for India to import all of its electronics components would be a rather difficult proposition.

Industry experts are opining that if India’s electronics sector is unable to reach the targeted production volumes despite the deployment of the Make in India program, it indicates toward a pressing need to create policies to help accelerate electronics manufacturing. The ESC’s chairman recommends focusing on indigenous manufacturing as a means to cut back on the high level of reliance on electronics imports.

ESC, which is an export promotion group backed by the Indian government, has estimated that the demand for electronics in India will surpass a value of US$400 bn by 2020. On the other hand, if the current production rate is maintained, India’s local electronics production will find it difficult to exceed US$100 bn by the same year.
 

However, if India is to put local electronics manufacturing on pace to meet projections, then a sharper focus will have to be laid on improving raw material supply chains, honing talent, and upgrade electronics manufacturing technology. The ESC also sees providing incentives for electronics exports to Europe as a means to improve production.

European Semiconductor Shipments Show Uptick in July 2015: ESIA

The European Semiconductor Industry Association (ESIA) has reported that the July 2015 shipments of semiconductors saw a marginal spike over June 2015 numbers. The shipments of semiconductors in July approximated US$2.837 billion in July 2015 – a 0.4% hike over the previous month. Market analysts are expecting this upward graph in semiconductor shipments in Europe to continue as the electronics and semiconductor technology finds its footing anew.

Although the shipments, when expressed in U.S. dollars, show a marginal increase in value, the same doesn’t hold true when the shipments are stated in euros. In euros, semiconductor shipments were pegged at €2.55bn in July 2015 which marks a 0.3% decline as compared to the previous month. On the bright side, the sales of semiconductors have risen 7.1% over July 2014, the ESIA says.

The increased demand for semiconductors and microprocessors is being attributed to the positive scenario that’s currently being observed in the logic semiconductor segment. The European IT industry is now also showing an increased demand for memory products, which continue to find uses in novel applications.

The last three months have looked good for the European technology industry, with both consumer and investor sentiment recovering. However, the European technology sector will continue to joust against other factors over the next few years until a full and more stable recovery is reported.

According to the ESIA, the last three months have been particularly positive for the electronics and semiconductor segment. Demand was seen to be strongest for semiconductor devices that are used in computing devices, consumer goods, and communications. There has also been a reported rise in the demand for wire communication applications, which have indirectly augured pushed up sales of semiconductors in Europe. Although 2015 is far from coming to a close, the year has already brought in much dynamism to the semiconductor sector in Europe – a trend that will likely continue into the next year as well.

Contract Manufacturer Foxconn Confirms US$5 Billion Investment in India – What are the Implications?

Foxconn, a key player in the global electronics contract manufacturing industry, has committed a US$5 billion investment to set up manufacturing facilities in the Indian state of Maharashtra, and potentially other locations as time goes by. Foxconn is best known for manufacturing iPhones and iPads for Apple Inc. The multibillion dollar investment pledge by Foxconn is making the news for several reasons.

For one, this announcement gives a massive lift to Indian Prime Minister Narendra Modi’s ‘Make in India’ program. Two, Foxconn’s decision to set up multiple facilities will translate to as many as 50,000 new jobs in the Indian state of Maharashtra over the next few years. Three, other companies in the electronics industry could draw inspiration and confidence from Foxconn’s move and consider India as a contract manufacturing base.

Although Foxconn is currently hogging the headlines by putting to rest rumors that were rife for a few months now, Finnish company Nokia deserves some credit for India’s developing image as a contract manufacturing hub. Nokia set a precedent of sorts by investing substantially in India (in Tamil Nadu) a decade ago to manufacture mobile phones on a large scale. With this, Nokia sent a message to the world: It was possible to make high-quality electronics in India while enjoying an economical advantage.

In the meanwhile, Foxconn’s investment will have a positive ripple effect thanks to its decision to get its suppliers to every location where its facility will come up. Market analysts expect a cluster effect to result from this sort of an arrangement – much like the automotive cluster that has taken firm root in western Maharashtra already. 

Foxconn’s entry into India comes at an opportune moment – the country is perfectly positioned not only to supply Indian-made electronics globally, but its domestic smartphone consumption has also grown by leaps and bounds. From the creation of new jobs to attracting more similar investments, it seems likely that if things go as planned, Foxconn’s entry into India could prove to be a historic business move.

Sony to Down Shutters on its Online Electronics Store Starting August 28

Electronics giant Sony will be winding down its online store on August 28, the company has informed. While the reason behind the electronics major’s decision is not clear yet (Sony, for one, hasn’t explained the specifics behind this step), it is being understood that the company has plans afoot of offering its customers an improved experience going forward. The company has described this pipeline initiative as an “online product showcase”. 

The company’s online store sells an array of electronics such as gaming consoles, smartphones, cameras, home theatre equipment, tablets and televisions. But with the company deciding to down the shutters on its online store before the month ends, customers can only purchase the electronics before 4pm (Eastern Time) on August 28, 2015. The announcement of the Japanese electronics giant’s decision to shut its online stores was made via an email sent to all customers of Sony Store. The email informed customers about the day and time before which the last purchase could be made.

Sony’s latest launch, the Xperia, has received positive reviews from customers. However, the company has still not been able to make much progress as far as reaching out to customers in the United States goes. As compared to the market share commanded by rivals Apple and Samsung, Sony’s share still remains meager. This could possibly be one reason why Sony has decided to try to traditional method of reaching out to its customers directly rather than relying on online channels and middlemen. 

While Sony has performed well across most other product segments in the last quarter, the same doesn’t hold true of its mobile phones business, which dipped by 16.3% in the latest quarterly results. Market analysts also cite the lack of brand awareness as another reason surrounding Sony’s dismal performance in the smartphone domain. If the buzz is to be believed, Sony will now be stressing on improving sales of products that are already faring well and scaling down products and departments that are not in line with expectations.

Strong Bilateral Trade between Germany and Vietnam Puts German Machinery Manufacturers into Action

Bilateral trade between emerging Asian and European economies is strengthening. According to latest reports, about 28% of all trade between Vietnam and the EU can be ascribed to Germany. In the first two months of this year alone bilateral trade was pegged at US$1.28 billion – a 15.9% gain over the same period last year. This is reason enough for Vietnam to further strengthen its trade relations with the European superpower. In fact, this endeavor seems mutual with both countries deciding to jointly set up a Chamber of Commerce allowing entrepreneurs to make the most of emerging business opportunities.

According to Dr Vu Tien Loc, the president of the Vietnam Chamber of Commerce, high hopes are pinned to the new joint chamber of commerce that is on the cards. He opined that the new organization would provide a formal business platform via which trade between both countries can be strengthened. A few initiatives being planned as part of this endeavor are: a joint trade mission, a diplomatic communication, and a long-term investment agreements by German companies in Vietnam.

Germany, encouraged by impressive profits in Vietnam, is optimistic about the future trade relations between these two countries. While it is the prospects of profit for Germany, for Vietnam, the value addition lies largely in using German technology and products. Opportunities abound for German machinery manufacturers for industries such as manufacturing and pharmaceuticals. So much so, that 46% of all machines imported by Vietnam are from Germany. 

According to market watchers, the opportunities presented for German machine manufacturers in the textile industry are immense. The other area where new avenues for growth are seen to be emerging are in the food processing sector, as Vietnam sees some encouraging developments in its food and beverages industry. German pharmaceutical companies rank third in the overall contribution to Vietnam’s drug and pharmaceutical industry.

Smart Jewelry Becomes Next New Trend Among Fashion-Forward Tech Enthusiasts

More women are now sporting smart wearable devices and accessory design and apparel makers see a massive opportunity here. Smart jewelry could possibly emerge as a whole new market in and by itself over the next few years as the penetration rate of wearable electronics soars. In fact, women could bring in higher business value than men, if one were to go by the findings of recent market studies. The NPD Group recently found in a study that more women than men are prospective wearable device buyers. The same study also concluded that women showed greater willingness to use smartphones for a higher number of activities – beating men at smartphone usage. 

The Consumer Electronics Association, on the other hand, has evidenced through recent studies that the space for smart electronics and wearables is only getting more crowded year on year. The Association found that about 10% of all shoppers interviewed as part of a survey said that they were planning to buy fitness trackers in the 2014 holiday season.  

This is an opportunity that Rebecca Minkoff, a designer of apparel and accessories, hopes to cash in on. A report in CNBC said that Minkoff, who has recently launched an entire collection of smart wearable jewelry that can be teamed with contemporary clothing, fuses together high technology with haute couture. This allows consumers to be plugged in while still looking voguish. As part of this endeavor, Minkoff has designed a bauble called a ‘Notification Bracelet’, which vibrates when the user receives a call or text from his or her chosen list of contacts. 

AT&T announced last month that it would stock this smart jewelry product in its stores, alongside several other smart wearable devices. With Minkoff’s range of smart jewelry already making waves on fashion runways in New York, it wouldn’t be entirely surprising to see more brands jump into the fray.

U.S.-based Electronic Waste Recycling Company Enters Guinness Book of World Records with Unique Feat

Advanced Technology Recycling (ATR), a family-run company in the United States, recently announced that it has shattered an existing world record for recycling the highest volume of e-waste in a week. The company said that this feat now takes them to the Guinness Book of World Records, replacing the current contender who hails from Australia. The recycling event, which was followed closely by local media, was held to mark World Earth Day. As part of the record, ATR ‘de-manufactured’ and recycled approximately 1.2 million oz of e-waste gathered from six different facilities spread across five American states in a time span of one week. 

According to ATR, the attempt to break the existing record—set back in 2013—was closely overseen by an official representing the Guinness World Records. The recycling event was conducted on April 25 at the company’s corporate HQs in Pontiac, Illinois.

Speaking to a group of visitors, the company’s co-founder, Ken Ehresman, said that the e-waste recycling initiative was a massive challenge. At the same time, it marked the successful diversion of waste material from the landfills. Over the last few years, the company has demonstrated how an enterprise can successfully turn discarded electronics items into a lucrative business and, at the same time, reduce the pressure on filled-to-the-brim landfills.

According to Ehresman, most of the waste that the company receives does not have much worth – this is especially true of glass parts used in obsolete computer monitors and televisions. However, chips and circuit boards often carry valuable materials. The company sources most of its waste from municipal corporations. It also has several neighborhood collection sites.

Among other activities, the company also undertakes the re-purposing of new electronic devices that remained unsold or became obsolete even before they could leave the warehouses. The significance of correctly handling e-waste came into the spotlight once again when AT&T was slapped with a US$50 million file recently for consciously dumping its electronic scrap into the regular waste stream.