Thailand gains from Vietnam tech boom but faces supply-chain challenge

Thailand tied to Vietnam’s tech rise

Thailand is emerging as an important supplier to Vietnam’s booming high-tech manufacturing sector, with bilateral trade rising 23.9% to US$8.595 billion in the first four months of 2026.

However, Vietnam’s rapid inflow of foreign investment and its shift towards advanced manufacturing are raising pressure on Thailand to strengthen its own position in regional supply chains, according to a report by the Office of Commercial Affairs in Ho Chi Minh City under Thailand’s Department of International Trade Promotion.

Thailand remains Vietnam’s sixth-largest trading partner

The report said Thailand remained Vietnam’s sixth-largest trading partner during the first four months of 2026, accounting for 2.5% of Vietnam’s total trade.

Vietnam exported US$3.759 billion worth of goods to Thailand, up 37.9%, while importing US$4.835 billion from Thailand, up 14.9%. This left Vietnam with a trade deficit of US$1.076 billion with Thailand, meaning Thailand retained a trade surplus.

Vietnam’s key exports to Thailand included computers and equipment, crude oil and machinery. Its main imports from Thailand were computers and components, household electrical appliances and machinery.

Vietnam’s import-heavy production model

Vietnam is moving rapidly towards becoming one of Asia’s major technology manufacturing hubs, but its export growth is still heavily dependent on imported raw materials, electronic parts and machinery.

In the first four months of 2026, Vietnam attracted US$18.728 billion in foreign direct investment, up 35.5% year on year. At the same time, large imports of components and production inputs pushed the country into a cumulative trade deficit of US$7.647 billion.

In April alone, Vietnam’s total trade reached US$95.965 billion, up 2.6% from the previous month and 28.9% year on year.

Exports stood at US$45.986 billion, down 1.3% from March but still up 22.2% from a year earlier. Imports rose faster, reaching US$49.979 billion, up 5.9% month on month and 35.7% year on year. As a result, Vietnam recorded a trade deficit of US$3.993 billion in April.

Electronics dominate Vietnam’s trade

Vietnam’s trade structure shows that the country has moved beyond traditional sectors such as textiles and agriculture, with high-tech products now playing a central role.

In the first four months, computers, electronic products and components were Vietnam’s largest export category, valued at US$42.761 billion, up 46.1%. They were followed by telephones and components at US$21.283 billion, machinery and components at US$20.927 billion, textiles and garments at US$11.932 billion, and footwear at US$7.632 billion.

On the import side, computers, electronic products and components were also the largest category, reaching US$66.341 billion, up 54.8%. Machinery and components followed at US$21.391 billion, ahead of fabrics, basic metal ores and plastic pellets.

The figures underline Vietnam’s role as a major assembly and export base, while also showing its continued reliance on imported inputs from regional suppliers, including Thailand.

US buys, China supplies

Vietnam’s trade strategy continues to balance major economic powers.

The United States remained Vietnam’s largest export market, with shipments reaching US$54.037 billion in the first four months, up 24.6%. Key exports to the US included computers, electronic products and textiles.

China remained Vietnam’s largest source of imports and its biggest trading partner overall. Two-way trade with China reached US$93.285 billion, up 31%, while Vietnam’s imports from China surged to US$70.262 billion, up 32.3%.

Other key partners included South Korea, Japan and Taiwan, reflecting Vietnam’s deep integration into Asian electronics and manufacturing supply chains.

Foreign investment strengthens Vietnam’s position

Foreign direct investment remains a key driver of Vietnam’s economic growth and industrial transformation.

Although FDI in April slowed to US$3.527 billion, down 61.5% from March, existing investors continued to expand their operations. The report said 71 projects increased their investment value in April, with combined additional capital of US$873 million, up 182.6%.

For the first four months, manufacturing and processing attracted the largest share of FDI at US$11.010 billion. Electricity and utilities followed with US$2.405 billion, wholesale and retail trade with US$2.056 billion, and real estate with US$1.303 billion.

Singapore and South Korea were among the major sources of investment.

Pressure builds on Thailand

Vietnam’s high-tech manufacturing boom presents opportunities for Thai exporters, particularly suppliers of electronics, components, appliances and machinery.

At the same time, Vietnam’s strong FDI performance raises a strategic challenge for Thailand. As global manufacturers expand production in Vietnam, Thailand faces growing competition for investment, export orders and supply-chain positioning.

The report suggests that Thai businesses should closely monitor changes in Vietnam’s industrial structure and supply chains, especially in high-tech manufacturing, electronics, machinery and next-generation industries.