Vietnam’s technology sector has grown significantly, often capitalising on trade tensions between the United States and China rather than being adversely affected. But this time it feels different.
The latest shock comes from Washington’s announcement of steep, reciprocal tariffs, imposing a punishing 46 percent on many Vietnamese exports. Although President Trump has announced a 90-day delay in implementing the tariffs, the prevailing uncertainty is already causing widespread concern among businesses. Vietnam has avoided direct confrontation, opting not to retaliate and instead removing tariffs on US imports to maintain good relations. Yet even diplomacy has its limits, especially when global supply chains become collateral damage.
The critical question now is whether Vietnam’s thriving tech industry can absorb this unprecedented tariff shock or whether the damage could be deeper and longer lasting than expected. Dr Sam Goundar, Senior Lecturer in IT at RMIT Vietnam, shares how shifting trade dynamics could reshape Vietnam’s tech sector.
According to Statista, in 2025, projected revenue for Vietnam’s semiconductors market is set to . Vietnam’s semiconductor industry has rapidly evolved into a crucial global player, but the US tariffs now pose a serious threat. With the addition of a 46 percent tariff to the price, Vietnamese semiconductors would not be competitive in the US market.
Dr Sam Goundar believes Vietnam’s semiconductor supply chain is especially vulnerable as high tariffs disrupt access to its largest export market, the United States. (Photo: Pexels)
The United States is Vietnam’s largest market for semiconductors. This is likely to force semiconductor manufacturing companies in Vietnam to rethink their production and export strategies. It will lead to potential instability in the supply chain, elevated costs associated with sourcing alternative markets or materials, and increased uncertainty for both investors and manufacturers.
Companies like Luxshare, a key Apple supplier, are considering shifting production to other countries, including the United States, to mitigate tariff impacts. This could result in .
Beyond semiconductors, there is the broader electronics export market such as phones, laptops, and consumer electronics, historically a powerhouse of Vietnam’s economy. It is now at risk as American buyers hesitate to absorb . There is an inherent risk that Vietnam will lose electronic market share to countries like India, Mexico, and Eastern Europe, which face lower tariffs.
Unlike other nations in Southeast Asia, Vietnam has developed a specialised role in the final assembly of high-end electronics. Prominent companies such as Foxconn, Samsung, LG Electronics, Intel, and Luxshare depend on Vietnam not only for labour but also for low-risk export channels. The new US tariffs challenge this model. While multinationals can shift production or absorb short-term losses, Vietnamese-owned SMEs that manufacture components or serve as subcontractors will likely shut down. The impact on factories, workers, and local economies could be immediate and significant.
The imposition of high tariffs creates an unpredictable economic environment, undermines Vietnam's appeal as an investment destination, and prompts foreign investors to exercise caution or seek more stable markets. Already, tech giants based in Vietnam such as , are reconsidering or pausing new investments and expansion plans. According to , manufacturers are exploring relocation of operations to countries not affected by the tariffs, which could diminish Vietnam’s role as a tech manufacturing hub.
Dr Sam Goundar recommends that Vietnam strengthen investor confidence by ensuring supply chain stability and accelerating progress in high-tech manufacturing. (Photo: Pexels)
Foreign investors, who previously viewed Vietnam as a stable environment amid geopolitical uncertainties, may now reconsider their stance, potentially impacting the country’s technology sector. Vietnam is shifting from basic electronics assembly to high-precision, high-value component manufacturing, such as semiconductors, sensors, and AI hardware, which depends heavily on foreign investment in advanced infrastructure and precision technology. This opportunity might now be lost.
Vietnam’s heavy reliance on US markets for tech exports has become a liability. Tech companies should strengthen ties with the EU, India, Japan, and ASEAN regions, where trade relations are stable and demand for electronics and semiconductors is growing. Diversification reduces exposure to geopolitical shocks.
To move up the value chain, Vietnam must transition from low-margin assembly to high-tech production. This means attracting capital for research and development, cleanroom facilities, and AI-chip fabrication so that Vietnam isn’t just assembling phones but inventing and designing the next generation of hardware.
Tech companies also need to adopt clear origin tracing, blockchain-based tracking, or local sourcing alternatives. This not only protects exports from punitive tariffs but also boosts Vietnam’s reputation for manufacturing independence.
Many companies can absorb tariff shocks by refining operational expenditures, leveraging AI, automation, and predictive analytics to streamline production, reduce waste, and maintain margins without cutting jobs.
Story: Dr Sam Goundar, Senior Lecturer in IT, School of Science, Engineering & Technology, RMIT 91tv Vietnam
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