"There's a lot more competition in this industry now, so in that sense it's become a bit difficult to hire more good engineers ... sooner or later the costs are going to start increasing," says Sato, who is trying to source around 500 staff over the next two years for a new design facility. He believes the crunch is unlikely to ease in the foreseeable future as schools continue to emphasize software over hardware-related skills.

Others say it has become even harder to fill senior positions.

"At the basic engineer level there's a really good pool of talent because Vietnam has a lot of educated people who are strong in math and science," Burke says. "The real shortage is as you get up to the project management level."

Legal professionals also see some aspects of Vietnamese law as problematic, especially if the government hopes to develop the domestic technology industry. Burke says while new technology transfer legislation will make it easier for foreign firms to disseminate solutions or knowledge to local partners, local copyright law leaves the door open for inventors or developers to stake claims to work produced under contract.

Baker & Mackenzie partner Seck Yee Chung notes foreign exchange regulations make it difficult for Vietnamese firms to repatriate earnings from revenue-sharing arrangements, and says the government should encourage collaboration in the information technology industry by making it easier to license business cooperation contracts.

Vietnam also shares some of the weaknesses common to other developing Asian nations.

"Infrastructure, especially in communications, is poor," Sato sighs. "Broadband is still very slow, so when we try to send a lot of data to Japan, everything gets stuck."

Rick Howarth, general manager of Intel Products Vietnam, says corruption remains a "looming cloud" over the country, and that its bureaucracy could prove trying for smaller investors.

"It's easier for us -- we've had the red carpet," he says. "The followers, the smaller customers, will have more difficulty than we do. But coming in understanding that there are going to be difficulties, and if you have the right level of patience, it can work, you can get things through the system."

Officials insist they are not ignoring the obstacles that could dog the electronics sector in the years ahead.

"Of course in the years ahead there will be some constraints, but in places like the educational system the country is already making efforts to improve itself," says SHTP's Mai. "There's still time for us to develop."

After all, he says, Vietnam has built an industry from scratch before. "It's the same as with software five years ago, there was nothing here, and no one could imagine that Vietnam would be a place where you could get (development) done," he says. "But nowadays more and more people come to do just that."