How to expand Vietnam capacitors market?

2024-05-26

Vietnam, as one of Southeast Asia's emerging markets, is experiencing unprecedented growth opportunities. In the past two years, Vietnam's downstream electronic and electrical industry has continued to develop and innovate, especially the 5G construction market expansion caused the capacitor market to show rapid growth.

More and more people are thinking how to expand the market? 

Firstly let’s know more about Vietnam from market size, import situation, market segments, growth.

According to recent economic data, the Vietnam's economic growth rate continues to lead the region, attracting substantial foreign direct investment. The youthful demographics and a growing middle class in the Vietnam market have created a vast potential demand for electronic products, particularly high-performance capacitors.

In the latest wave of industrialization, the Vietnamese government has initiated a series of reforms aimed at introducing more high-tech and sustainable industries, including the development of new energy and 5G sectors. These initiatives have provided new growth opportunities for the capacitor manufacturing industry.

In 2020, Vietnam's capacitor market size will be approximately US$1.5 billion, a year-on-year increase of 5%. The market size will reach US$1.6 billion in 2021, a year-on-year increase of approximately 7%. The market size is expected to reach US$1.2 billion in the first three quarters of 2022, and is expected to exceed US$1.7 billion for the full year.

1. Import situation

Vietnam relies on imports for 80% of its capacitors. Major importing countries include China, South Korea, Singapore, Japan and other countries. Imports will increase from US$1.1 billion in 2020 to US$1.2 billion in 2021. China (including Hong Kong and Taiwan) is the largest source, accounting for 61%.

2. Market segments

Divided by capacitor type, aluminum electrolytic capacitors account for about 60%, porcelain capacitors account for 20%, and film capacitors account for 15%. By application field, consumer electronics accounted for 55%, industrial control accounted for 20%, and new energy vehicles accounted for 15%.

3. Growth drivers

Market growth mainly benefits from the development of the downstream electronic and electrical industry. Driven by the downstream market, the capacitor market will maintain a growth rate of 8-10% in the next 3-5 years; new energy and 5G are the main hot spots for market growth, and the market size is expected to be 2025 will reach $2.5 billion.

As the consumer electronics market expands and industrial automation advances, Vietnam's demand for high-performance electronic components has steadily increased. Market research indicates that capacitors, especially high-quality products for new energy and 5G applications, will occupy an increasingly important position in the Vietnam market. This means that investors and enterprises, when formulating market entry strategies, need to consider a variety of factors, including consumer trends, policy support, technical thresholds, and market education.

New Energy and 5G as Growth Points for Vietnam's Capacitor Market

The growth trajectory in Vietnam's electronic sector is taking a steep turn with the introduction of new energy solutions and the advent of 5G technology. As the country embarks on smart city projects and upgrades its telecommunications infrastructure, the demand for capacitors, particularly those capable of withstanding the new energy and 5G requirements, is surging.

Renewable energy projects such as solar and wind power are gaining momentum in Vietnam, with the government providing policy incentives to attract investment in this sector. Capacitors play a crucial role in energy storage and conversion for these technologies, consequently opening a lucrative market segment for high-grade capacitor manufacturers.

Moreover, 5G rollout is another significant driver for the capacitor market growth in Vietnam. This next-generation network requires a massive deployment of base stations, each one relying on a multitude of capacitors for efficient operation. High-performance capacitors, thus, become critical to ensure the stability and effectiveness of 5G networks.

The intersection of new energy and 5G presents an exponential growth opportunity for capacitors, primarily due to the high-power and high-frequency operations involved in both sectors. The demand for specialized capacitors, such as multi-layer ceramic capacitors (MLCCs) and tantalum capacitors, is expected to rise significantly. These components are essential for managing power flows in renewable energy systems and supporting high-speed data transmission in 5G networks.

How we expand the Vietnam market?

HONGDA Capacitors, https://www.hongdacapacitors.com/, as the leading capacitors, inductors manufacturer in China, focus on capacitors, inductors production.

The capacitors include, but no limit to: Tantalum capacitors, MLCC, Electrolytic capacitors, Polymer capacitors.

To tap into Vietnam's flourishing market, we needs to adopt a multifaceted approach that resonates with the local demands and complements the unique market dynamics. Considering Vietnam's burgeoning demand for capacitors in new energy and 5G spaces, the approach must be innovative, collaborative, and forward-thinking, we have below solutions:

1-- Product localization strategy

To accommodate the demand for high-quality capacitors enhanced for new energy and 5G technologies, HONGDA Capacitors recommend our high end product, like:

1) Inductors: widely used for communication equipments, phones, laptop, security products and so on. High Q series: HDTC, HTF, power inductors, chip inductors, etc available.

2) Super capacitors: widely used on emergency light, smart timer, car GPS/Tracker, smart meter, energy meter, water meter, gas meter application.

Common series: HCE, HHT; V type, H type, C type available.

3) Polymer electrolytic capacitors: with radial, SMD type available. These capacitors are widely used on power supply, GPS, and Base station, play station, etc. We also developed HPD19 miniatured size.

Build a quick-response localized supply chain, increase overall supply flexibility, and improve delivery speed

2. - Channel construction

HONGDA Capacitors is looking for local sales rep to promote us, as they have local language, location advantage, they can visit them conveniently.

Also we would like to cooperate with local distributor to cover second and third tier cities, we offer good customer protect policy to protect distributor’s effort, give them special price support, latest market info., quick response, etc.

3. - Promotion

HONGDA Capacitors can make joint exhibitions with distributors in vietnam, and carry out targeted promotion activities, provide customized solutions, visit end customer in local. At the same time, we ensure product cost-effectiveness to win more customers.