What's Happening?
Vietnam's manufacturing industry is focusing on enhancing its position in global value chains amidst shifting supply chains and tariff uncertainties. At the M-TALKS 2025 forum, Truong Thi Chi Binh, Vice President of the Vietnam Association for Supporting Industries, emphasized the need for Vietnam to transition from basic processing to mastering OEM (original equipment manufacturing) and eventually achieving ODM (original design manufacturing) and OBM (original brand manufacturing) capabilities. The forum highlighted Vietnam's potential as a reliable manufacturing hub, despite political shifts in the U.S. and reciprocal tariffs. The government is actively monitoring product origins and adjusting trade strategies to strengthen its manufacturing sector.
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Why It's Important?
Vietnam's strategic shift in manufacturing is crucial for its economic growth and competitiveness in the global market. By advancing to higher manufacturing capabilities, Vietnam can attract major buyers and increase foreign direct investment, which reached nearly $12 billion in the first half of 2025. This transition is vital for Vietnam to maintain its position as a trusted manufacturing hub in Southeast Asia, especially as global supply chains evolve. The move towards ODM and OBM capabilities will enable Vietnamese firms to have a stronger voice in the supply chain, potentially leading to increased export orders and economic stability.
What's Next?
Vietnamese firms are encouraged to invest in research and development to enhance their manufacturing capabilities. Companies like GCool are already investing heavily in R&D and recruiting experts to work on core technology, holding over 20 design patents. The focus will be on building design capabilities, improving soft skills, and understanding customer needs to compete with regional competitors like Malaysia and Thailand. The government and industry leaders will continue to support these efforts to ensure Vietnam's manufacturing sector can meet the demands of foreign buyers and capitalize on new opportunities.
Beyond the Headlines
The push for higher manufacturing capabilities in Vietnam also highlights the need for improved infrastructure and workforce development. As companies transition to more complex manufacturing processes, there will be a growing demand for skilled labor and advanced technology. This shift could lead to long-term economic benefits, including job creation and increased innovation. However, it also poses challenges, such as the need for certifications and detailed cost breakdowns to meet international standards.
