Hanoi (VNS/VNA) - The shortage of electronic chips is causing difficulties forbusinesses and electronics manufacturers as chipsets are used in mostelectronic products and technological devices.

DaoPhan Long, Chairman of the Vietnam Association of Mechanical Industry (VAMI),said the chip shortage was causing many businesses production problems.

Notonly was there a shortage of goods, but delivery times had also become muchlonger. Many enterprises producing electronic equipment and technology in Vietnamhave suffered the impact of the global chip crisis, noted Long.

Atechnology expert from Appota shared that chipsets or microprocessors appear inmany products, from electronic cards to other devices such as televisions,refrigerators, cameras, and cars.

However,few Vietnamese enterprises can make a chip from start to finish, includingresearch, design and production, said the expert.

Allproducts must be imported from other countries, mainly China, whichmeans domestic electronics and technology manufacturing enterprises havebeen affected by the global chip crisis.

Indomestic automobile production, Ninh Huu Chan, General Secretary of the VietnamAutomobile Manufacturers' Association (VAMA), said the shortage of chips wouldmean fewer cars would be put on the market and their price might increase soon,especially imported cars.

Thisshortage would likely carry on until the end of this year and even into nextyear, he added.

Expertssaid that the global shortage of processor chips was due to the growing demandfor smartphones, computers and other electronic devices during the COVID-19pandemic, along with the technology-related trade tension between the USand China.

Amidthe pandemic, along with the shortage of containers, and high transportationcosts, the lack of processing chips for production has put pressure onmanufacturing enterprises, said Chan.

Chipmanufacturing requires a high level of sophistication and technology, largeinvestment capital and time to build and install equipment, he added.

Longsaid the cost to build a factory to produce processing chips could cost upto tens of billions of dollars and few companies could compete with the likesof Intel and Samsung.

Theaccuracy and quality of the chips also have very strict requirements, he added.

Tocope with this situation, domestic electronic equipment and technologyfirms have had to consider diversifying their supply, said Tran Viet Hai,general director of BKAV Electronics.

Toovercome difficulties, businesses needed to find alternative sources of rawmaterials and expand supply networks, said a representative of the HanoiSupporting Industry Business Association. It was necessary to be proactive inresearch, development and use of more popular and flexible components andchipsets.

NguyenAnh Tuan, Chairman of the Ho Chi Minh City Semiconductor Industry Association,said the chip crisis was having a stronger impact on large, foreign-investedmanufacturers such as Samsung and Intel as opposed to those in the fieldof semiconductors and electronics in Vietnam.

Themember enterprises of the association were mostly small and medium-sized, witha small number of chips used, so they could flexibly manage, find a source ofreserve chips or switch to collecting goods from small manufacturers, Tuan said.

Currently,chip and wafer (a thin slice of semiconductor) factorieswere focusing on workers to run at full capacity, so the possibility of thisshortage crisis would not last beyond next year.

The Nguoi Lao Dong (The Labourer) newspaperquoted Tuan as saying that however, rising chip prices would have a directimpact on the production and business efficiency of many Vietnamese enterprises.

Healso noted that most Vietnamese technology enterprises could process chipdesigns, but could not produce a complete chip. In the long term, investing indomestic chip production was the fundamental solution to reduce dependence onimported goods, although this was a very long and difficult road to go down.

Afew pioneering enterprises in the technology field of Vietnam have initiallyproduced chips, from production to market, but their scale is limited and theiroutput is still modest.

Forexample, Dien Quang Lamp JSC was the first unit in Vietnam to produce SMD LEDchips with capacities of 0.2W, 0.5W, and 1W, enough to meet the needs of LEDproducts for both domestic and export markets.

DienQuang is promoting investment in synchronous production lines of internationalstandards, with LED chip production lines, electronic boards and otherproducts./.