Information technology hardware and electronics have witnessed a high growth rate in Vietnam but local companies are struggling against foreign-invested firms to get a foothold in their own market.

Revenue of the ICT hardware and electronics industry reached more than 11.3 billion USD last year, accounting for 82 percent of total turnover of the whole sector last year, and over 100 percent against the previous year, according to data from the Viet Nam ICT White Book 2012.

However, Vietnamese enterprise production accounted for only 10 percent of the total value and the three sub-sectors generating the largest revenues – electronics and telecommunications, mobile phones and computers – were in the hands of foreign-invested companies.

Nguyen Trong Duong, director of the Information Technology Department under the Ministry of Information and Communication, said high growth last year was thanks to the export turnover of foreign-invested companies such as Samsung, Canon, Panasonic, Foxcomm and Nokia.

Total export turnover of spare parts, computers, electronic products and telecommunication equipment reached 10.89 billion USD last year, an increase of 92 percent over the previous year, White Book revealed.

Mobile phones earned the highest export revenue with 6.89 billion USD, accounting for more than 60 percent of the total, while revenue from hardware products was small and tended to reduce.

Although the country has been developing its ICT hardware and electronics industry for the last 20 years but domestic companies are still struggling to get a foothold in the domestic market.

Currently, most Vietnamese enterprises are operating in manufacturing and assembling desktop computers but the localisation ratio of products remains modest as most accessories and parts must be imported.

Analysts said that with the small market capacity, high production cost and underdeveloped research and development, Vietnamese enterprises would find it difficult to compete with Chinese products.

They suggested Viet Nam focus on developing support industries, with Vietnamese companies working as satellites for foreign-invested companies, and increase investment in R&D.

Duong said producing computers and mobile phones, like other big foreign companies were doing, was not suitable to most Vietnamese small and medium enterprises.-VNA