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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 holds 71 billion-ton CO2 storage potential, unlocking CCUS opportunities in oil and gas

Vietnam holds 71 billion-ton CO2 storage potential, unlocking CCUS opportunities in oil and gas

Vietnam is considered a country with immense potential to develop CCS and CCUS across its petroleum industry, especially via offshore carbon geological storage

Carbon capture and storage (CCS), as well as carbon capture, utilization, and storage (CCUS) technologies, are increasingly recognized as vital pathways in emissions reduction—particularly for hard-to-abate industrial sectors.

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Speaking at the workshop "Carbon Capture, Utilization, and Storage (CCUS) Technologies: Solutions to Accelerate Net Zero in Vietnam" on October 27, Dr. Nguyen Huu Luong, Senior Expert at the Vietnam Petroleum Institute, noted that current global operational CCUS capacity remains relatively modest, with approximately 64 million tonnes of CO2 being captured.

However, global CCS deployment is forecast to expand rapidly, surging nearly tenfold by 2030 to surpass 500 million tonnes per year.

Globally, there are 77 CCUS projects in commercial operation and 610 under various stages of development, with an anticipated average compound growth rate of nearly 40% through 2030. Key geological formations utilized worldwide for CO2 storage include depleted oil and gas reservoirs, deep saline aquifers, and unminable deep coal seams.

To date, cumulative global injected and stored CO2 stands at around 380 million tonnes.

"This is an extremely modest figure against a theoretical global capacity exceeding 10 trillion tonnes of CO2, demonstrating enormous headroom for growth in this sector," Dr. Luong said.

The International Energy Agency (IEA) has concluded that reaching Net Zero emissions by 2050—moved forward from the previous 2070 horizon—will require an additional 50% expansion in CCUS deployment. In 2023, the IEA also underscored CCUS as an indispensable, mandatory component to achieve Net Zero targets.

For Vietnam, joint research conducted by Petrovietnam (PVN) and the Japan Organization for Metals and Energy Security (JOGMEC) identified Vietnam as possessing among the highest CO2 storage potentials in Southeast Asia, estimated at approximately 71 billion tonnes. This storage capacity is concentrated primarily in three offshore sedimentary basins: the Song Hong Basin (39 billion tonnes), the Nam Con Son Basin (22 billion tonnes), and the Cuu Long Basin (10 billion tonnes). Crucially, Vietnam could capitalize on over 1 billion tonnes of effective storage capacity within depleted oil and gas fields alone.

Vietnam also holds distinct competitive advantages for CCUS, including 34 offshore oil and gas fields whose storage suitability has been preliminarily evaluated by Petrovietnam. Notably, in 2011, Vietnam became the first nation in Southeast Asia to successfully implement CO2 enhanced oil recovery (EOR) injection at the Rang Dong field.

CCUS scope in Vietnam’s decarbonization roadmap

Addressing the workshop, Deputy Minister of Agriculture and Environment Le Trong Yen emphasized that achieving Vietnam’s Net Zero emissions commitment by 2050 necessitates profound transformation across economic growth models—particularly as Vietnam targets ambitious double-digit GDP expansion—as well as production methods and natural resource utilization.

According to the Deputy Minister, this transition must run parallel with ensuring national energy security, ecological integrity, and industrial competitiveness while creating fresh development impetus. Every mitigation solution must be evaluated on scientific rigor, economic feasibility, and Vietnam’s unique practical conditions.

To lay the groundwork for real-world deployment, Mr. Yen called for clearly defining the specific role, positioning, and application scope of CCUS within Vietnam's national decarbonization roadmap. Concurrently, technical standards, scientific benchmarks, and safety protocols across the entire CCUS value chain must be thoroughly clarified.

Industry specialists noted that Vietnam has already established baseline prerequisites for CCUS development. The country possesses concentrated point-source CO2 emissions from power generation and heavy industries, vast offshore geological storage capacity in sedimentary basins and depleted fields, and mature oil and gas expertise, seismic data, and infrastructure that can be repurposed for CO2 transport, injection, and long-term storage.

Furthermore, the gradual emergence of a domestic carbon market, green finance frameworks, and legal improvements governing petroleum operations provide foundational momentum for CCUS execution.

Most notably, the amended Petroleum Law (Law No 10/2026/QH16), adopted by the National Assembly on August 23, 2026, and taking effect on March 1, 2027, introduced specific legal provisions governing carbon capture and storage operations linked to petroleum activities, establishing an initial regulatory cornerstone for field deployment.

Dr. Nguyen Thanh Tung, Deputy Director of the Vietnam Petroleum Institute, assessed that incorporating CCUS provisions into the revised Petroleum Law is a decisive milestone, providing the legal basis to transition from exploratory research toward commercial projects.

However, Dr. Tung stressed that to commercialize CCS/CCUS on an industrial scale, Vietnam must establish comprehensive guidelines covering the full project lifecycle: acreage block awards, investor selection, site characterization, injection licensing, operational monitoring, site closure, and post-closure long-term liability frameworks.

From an international perspective, delegates concluded that under appropriate market conditions, CCS/CCUS provides critical decarbonization pathways for hard-to-abate industries, spurs technological innovation, and enhances the export competitiveness of low-carbon goods. The degree to which mitigation credits are monetized on carbon markets will ultimately hinge on robust legal architectures, baseline carbon accounting methodologies, and stringent measurement, reporting, and verification (MRV) protocols.


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Vietnam’s favourable conditions for expanding clean energy sources, however, the energy transition still faces significant challenges.

Vietnam’s solar and wind power capacity has expanded significantly, with the two sources accounting for approximately 19% and 7% of the country’s electricity mix, respectively, in 2025, according to Ms. Nguyen Thi Thu Huyen of the Institute of Energy under the Ministry of Industry and Trade.

Speaking at the recent “Clean Energy for a New Era of Growth” forum, Ms. Huyen said the figures highlighted the increasingly important role of renewable energy in Vietnam’s power sector.

Vietnam has favourable conditions for expanding clean energy sources, including onshore and offshore wind, rooftop solar, biomass and emerging energy technologies. Under power development planning scenarios, solar power capacity could reach hundreds of thousands of megawatts, while offshore wind capacity could exceed 100,000MW by 2050.

However, the energy transition faces significant challenges. Growing electricity demand from data centres, artificial intelligence and electrified transport requires reliable, stable and affordable power supplies. Meanwhile, the existing transmission grid, dispatch capabilities and energy storage infrastructure have yet to keep pace with these demands.

Experts at the forum proposed a range of long-term solutions. Dr Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy Research, stressed that the transition to clean energy must follow a roadmap suited to Vietnam’s economic development. Adjustments to power planning should take into account implementation capacity, access to partners and the ability to master technology.

He also highlighted the need for coordinated efforts to address policy and regulatory challenges, mobilise investment, develop energy infrastructure, strengthen technological capabilities and train highly skilled workers.

Dr Mai Duy Thien, Chairman of the Vietnam Clean Energy Association, said expanding clean energy required more than simply increasing power generation capacity. Instead, a comprehensive approach was needed, integrating planning, transmission, distribution, demand-side management and financing.


Vietnamese exporters face dual challenge over power supply

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Ensuring an adequate power supply remains critical as Vietnam's manufacturing and exports expand rapidly. However, some companies in global supply chains must also meet requirements on renewable electricity use and emissions. A draft amendment to Vietnam’s Electricity Law, now under consideration by the National Assembly, seeks to refine mechanisms to address these needs.

On October 20, at a working session of the National Assembly, the country's legislature, Minister of Industry and Trade Le Manh Hung presented a proposal to amend and supplement several provisions of the Electricity Law. The draft focuses on resolving bottlenecks in power generation and grid investment, while refining the framework for direct power purchase agreements (DPPAs) and renewable energy certificates.

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This presents the power sector with two parallel challenges: ensuring sufficient electricity to support economic growth and enabling businesses to access clean power and verify its use to meet customer requirements.

Reliable power supply remains an immediate priority

Vietnam’s manufacturing and export activities continued to expand strongly in the first nine months of 2026. Merchandise exports reached $434.3 billion, up 24.5% from a year earlier, according to the National Statistics Office. Industrial production rose 12.3%, while manufacturing and processing output increased 12.9%.

The expansion in manufacturing has been accompanied by a substantial rise in electricity demand.

The Ministry of Industry and Trade reported that commercial electricity consumption nationwide reached 237.19 billion kilowatt-hours (kWh) in the first nine months, up 9.66% year-on-year. Industry and construction accounted for 122.18 billion kWh, an increase of 8.32%, representing around 51.5% of total electricity sales.

Accounting for more than half of consumption, industry and construction remain the largest electricity-consuming sectors. For factories, a stable power supply is essential to keep production lines running, operate equipment and meet delivery schedules.

The ministry said the power system operated safely and reliably during the nine-month period, meeting demand from businesses and households. Maintaining supply over the longer term, however, will require coordinated development of generation capacity, transmission networks and grid dispatch capabilities.

According to Vietnam Electricity (EVN), total electricity generated and imported across the system reached 265.79 billion kWh in the first nine months. Coal-fired power contributed 132.63 billion kWh, or 49.9%, while hydropower generated 68.48 billion kWh, or 25.8%. Renewable energy sources, as classified by EVN, supplied 33.6 billion kWh, accounting for 12.6%. Gas-fired power contributed 20.48 billion kWh, while electricity imports totalled 10.3 billion kWh.

Hydropower output fell nearly 9% from a year earlier amid hydrological conditions affected by the El Niño phenomenon.

By contrast, coal- and gas-fired power together increased their share of total generation and imports to 57.6%, from 53.9% a year earlier, despite growth in other renewable energy sources. The shift towards a greater share of fossil fuels adds pressure to greenhouse gas emissions at a time when environmental requirements are becoming increasingly linked to manufacturing and export activities.

At the "Clean Energy for a New Era of Growth" forum held in Hanoi on October 27, Mai Duy Thien, chairman of the Vietnam Clean Energy Association, stressed the need to consider energy development in the context of economic growth and national competitiveness.

Clean energy development would not only help diversify supply but also enable businesses to adapt to increasingly stringent environmental standards, he said. This highlights the need to address energy security and the transition to cleaner electricity in parallel.

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Renewable electricity requirements are already being incorporated into the supply-chain policies of multinational corporations, rather than remaining a trend expected to emerge in the future.

According to its 2026 Environmental Progress Report, Apple has incorporated a requirement for 100% renewable electricity into its Supplier Code of Conduct. The company requires its direct manufacturing supply chain to use 100% renewable electricity for Apple-related production by 2030.

According to the U.S. technology company, electricity consumption at supplier factories is the largest source of greenhouse gas emissions across its supply chain. Switching to renewable power is therefore a key component of its 2030 carbon neutrality goal.

Environmental requirements are also being considered as part of trade policy. In the United States, the proposed Clean Competition Act, introduced in Congress in December 2025, would establish a carbon border adjustment mechanism based on the emissions intensity of goods.

Meanwhile, the European Union entered the definitive phase of its Carbon Border Adjustment Mechanism (CBAM) on January 1, 2026, with the purchase and surrender of CBAM certificates scheduled to follow a phased timeline beginning in 2027. The mechanism covers products in six sectors: iron and steel, aluminium, cement, fertilizers, electricity and hydrogen.

Under the scheme, EU importers must fulfil obligations linked to emissions embedded in covered goods. Carbon costs could affect purchasing prices and the competitiveness of foreign producers, making emissions management an economic consideration as well as an environmental responsibility for businesses.

In Vietnam, demand for renewable electricity has already translated into actual transactions.

On June 1, 2026, Samsung Electronics Vietnam Thai Nguyen (SEVT) announced that it had implemented a direct power purchase agreement through the national grid, becoming the first corporate customer to complete a transaction under the DPPA mechanism.

The electricity supplied under the agreement comes from the TTC Duc Hue 2 solar power plant in Tay Ninh province, with expected output of around 70 million kWh a year.

The government established the DPPA framework under Decree 57/2025/ND-CP, which was subsequently amended and supplemented by Decree 243/2026/ND-CP. Current regulations have expanded participation to eligible electricity retailers operating in qualifying industrial and economic zones, creating additional arrangements for industrial customers to purchase renewable electricity.

Samsung’s case demonstrates that demand for renewable power has moved beyond commitments to actual transactions. It also raises questions about how the DPPA mechanism can be expanded to give more manufacturers access to clean electricity.

However, transactions conducted through the national grid require participants to account for network usage, dispatch, reserve capacity and other system services. How these costs are calculated and allocated directly affects companies’ overall electricity bills, as well as the interests of customers that do not participate in DPPAs.

This was among the issues the National Assembly’s Committee on Science, Technology and Environment called for clarification in its appraisal report on the draft Electricity Law amendments on October 20. The committee said DPPA participants should fulfil their cost obligations in full to prevent unreasonable cost transfers to other customers.

Beyond access to renewable electricity, businesses also need tools to verify the environmental attributes of the power they consume. Renewable energy certificates (RECs) serve this purpose, but their trading and use require reliable registration, verification and traceability mechanisms.

The draft amendments seek to establish a more complete legal framework for the REC market. The appraisal committee has called for clear rules on certificate ownership, trading and cancellation after use to prevent the same environmental attributes from being claimed more than once.

The issues under consideration therefore go beyond expanding the right to purchase renewable electricity. They also concern the overall cost of transactions and businesses’ ability to demonstrate that they use clean power - conditions that matter to companies seeking to meet environmental commitments made to international partners.

Reuters recently reported that the U.S.-China tariff war had helped accelerate the relocation of manufacturing to Vietnam. The expansion of export-oriented production has brought rising electricity demand. However, Reuters warned that the high share of coal-fired power in Vietnam’s electricity mix could pose an emissions challenge as international buyers increasingly scrutinize the carbon footprints of their supply chains.

For domestic companies seeking deeper integration into global supply chains, the ability to secure reliable electricity, manage emissions and meet partners’ environmental standards is likely to become increasingly important. These factors could increasingly influence the competitiveness of Vietnamese businesses as environmental requirements across global supply chains become more stringent.

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