The rise of Vietnam's supporting industries: Strategic transformation from import dependence to a core node in the global supply chain

From Assembly Base to Manufacturing Hinterland: The Strategic Turning Point of Vietnam's Supporting Industries

On July 2, 2026, a forum focused on supporting industries in Ho Chi Minh City sent a clear signal: Vietnam is trying to shake off its long-standing role as an "assembly economy" dependent on imported intermediate goods by systematically supporting local component, material, and technical service providers to embed itself in a more resilient global supply chain system. This transformation is not only an endogenous need of industrial policy but also an inevitable choice under global capital flows and geo-economic restructuring.

The Structural Contradiction Behind the FDI Surge

According to disclosures at the forum, in the first five months of 2026, Vietnam's registered foreign direct investment (FDI) reached $24.81 billion, up 34.9% year-on-year, of which manufacturing and processing industries absorbed $8.06 billion, the highest share. In the same period, Vietnam's total trade volume approached $496.7 billion, with exports of electronics, computers, and components at $63.5 billion, machinery and equipment at $30 billion, and mobile phones and components at $29 billion.

However, behind these bright numbers lies a severe import dependence: imports of computers, electronic products, and components still amounted to $6.62 billion. Cao Thi Bich Van, Deputy Director of the Ho Chi Minh City Investment and Trade Promotion Center, pointed out at the forum, "These data show that Vietnam remains attractive as a destination for supply chain restructuring, but at the same time, the huge import gap for intermediate goods is precisely the potential for the growth of local supporting industries, and it also highlights the urgency of strengthening local supply chains and reducing import dependence."

This structural contradiction of "high export growth – high import dependence" is precisely the core obstacle to Vietnam's manufacturing upgrade. When multinational enterprises relocate assembly lines to Vietnam, core components, precision molds, and high-end materials are still largely imported from China, South Korea, and Japan, resulting in low local added value and exposing supply chain fragility.

Policy Framework: The 2026-2035 Supporting Industry Development Plan

To address the above challenges, the Vietnamese government has launched the "2026-2035 Supporting Industry Development Plan." The plan sets clear quantitative targets: by 2030, increase the average localization rate of key industries to 40-45% and make Vietnam one of the top three most competitive industrial economies in ASEAN; by 2035, most supporting industry sectors should have advanced technical capabilities and participate more deeply in the global value chain.

The core logic of this policy framework is that it cannot remain in the assembly and processing stage forever; it must gradually master the production capacity of components, materials, technology, and quality standards, and build a strong local supplier network. As an economic, commercial, and innovation center, Ho Chi Minh City has listed supporting industries as a strategic priority, promoting a growth model centered on productivity, technology, digital transformation, and regional connectivity, while fostering industrial clusters, expanding local supplier networks, and helping small and medium enterprises improve production capacity to meet international standards.

Certification Thresholds and Capacity Building at the Enterprise LevelAssisting industries to integrate into the global supply chain is no easy task. Nguyen Ngoc Dang Khoa, Deputy Director of Business Development at SMC Phu My Precision Machinery Co., Ltd., emphasized at the forum that compliance with international standards is the ticket for enterprises to enter multinational procurement systems. In addition to common standards such as ISO 9001, ISO 14001, ISO 45001, and the Responsible Business Alliance (RBA), different industries require specific certifications: IATF 16949 for the automotive industry, AS9100 for the aerospace industry, and ISO 13485 for medical devices.

"These certifications are not only customer requirements but also provide a framework for standardized production systems, ensuring consistent product quality across different factories," Khoa said. For the large number of small and medium-sized enterprises in Vietnam, obtaining these certifications requires investment in capital, technology, and management capabilities, and this is precisely the key entry point for policy support and multi-party cooperation.The rise of Vietnam’s supporting industries is not a simple expansion of production capacity, but an industrial revolution from “working for others” to “weaving independently.” As global enterprises prioritize risk diversification and supply chain resilience, Vietnam has the opportunity to secure a more central position in Asia’s manufacturing network, leveraging its policy determination, geographic location, and open posture. However, the success of this transformation ultimately depends on whether local suppliers can cross the thresholds of technology, standards, and trust—a key variable that international investors will need to closely monitor over the next five years.