American businesses make strong progress in Vietnam

U.S. giants like Intel, Cargill, Nike, AES, Murphy Oil, First Solar, Boeing and Apple have made extensive investments in Vietnam since the two countries normalized their relations in 1995.

Intel

American giant chipmaker Intel started to invest in Vietnam in 2006, building Intel Products Vietnam (IPV) in Ho Chi Minh City as its single largest assembly and test plant within the major’s assembly and test network globally. With a total investment of $1.5 billion to date, it is the largest U.S. high-tech investment in Vietnam.

Intel has plans to enlarge its business and investment in Vietnam, Intel CEO Patrick Gelsinger said at a meeting with Vietnamese Prime Minister Pham Minh Chinh in May 2022. Intel's expansion in Vietnam in the coming period would feature environmentally friendly high technology and close cooperation with Vietnamese enterprises, he added.

Intel has plans to put another investment of about $1.5 billion into Vietnam for chip manufacturing, said Nguyen Mai, chairman of the Vietnam Association of Foreign-Invested Enterprises (VAFIE). This is Intel's third factory outside the U.S., with the two others in Scotland and Israel, he added.

Regarding global operations, Intel earned a post-tax loss of $1.3 billion on a net revenue of $24.7 billion in the first six months of 2023.

Cargill

Cargill established its business in Vietnam in 1995 as one of the first American companies investing after the normalization of Vietnam-U.S. relations in the same year. Since then it has grown into one of the most prominent animal nutrition and agricultural commodity companies in the country.

Last August, Cargill said it would launch its newest Vietnam manufacturing facility in late September, bolstering its commitment to long-term investment in the country. The production site covers about six hectares in the southern province of Dong Nai’s Giang Dien Industrial Park - about one hour’s drive northeast of Ho Chi Minh City.

The giant announced the state-of-the-art factory project in December 2020 on the occasion of its 25th year of operations in Vietnam, saying that $28 million would be invested in the animal nutrition facility. Cargill added it has invested more than $160 million in Vietnam to build 11 animal nutrition plants, one grain and oilseed warehouse, and two aqua technology application centers for fish and shrimp, and has 1,500 employees.

Nike

For fiscal year 2023, ending May 31, 2023, Vietnam remained the biggest supplier of the U.S.-based footwear and apparel giant.

For footwear, Vietnam was the top manufacturer, accounting for 50% of Nike’s total output. Other major producers were Indonesia with 27% and China with 18%. Vietnam’s performance was an improvement from 44% in fiscal year 2022, during which the Covid-19 pandemic heavily impacted the country. The figures were 51% in fiscal year 2021 and 50% in fiscal year 2020.

As of the end of May, 15 contract footwear manufacturers of Nike were operating 123 factories in 11 countries.

Regarding apparel, Vietnam was also the largest producer, making 29% of Nike’s products, followed by China with 18% and Cambodia with 16%. Vietnam’s figures were 30% in fiscal year 2021 and 28% in fiscal year 2020, Nike added.

As of the end of May, Nike was operating 55 apparel contract manufacturers with 291 factories in 31 countries.

AES

AES, an American Fortune 500 company in the energy sector, is conducting business in both thermal power and LNG-to-power in Vietnam.

AES has been operating the 1,120-MW BOT Mong Duong 2 coal-fired power plant in the northern province of Quang Ninh since 2015. The $2-billion project is 100% foreign-invested and will be transferred to the Vietnamese government after 25 years per the build-operate-transfer (BOT) format.

In August 2023, the central province of Binh Thuan granted investment certificates to six investors in four projects within the LNG-to-power chain in the south-central Vietnam province. Of which, AES is the investor of the Son My LNG Terminal project and the 2,250 MW-Son My 2 combined cycle gas turbine power plant project. The terminal, to be built by a joint venture between AES and PV Gas, has an investment of $1.4 billion.

President of AES Vietnam Joseph Uddo said AES has been investing in Vietnam’s energy sector for over 12 years and will continue helping the country’s energy transition.

Murphy Oil

The Texas-headquartered oil giant has so far invested about $300 million in exploration activities in Vietnam and is operating oilfields at the Cuu Long and Phu Khanh basins offshore southern Vietnam. It also cooperates with Petrovietnam Exploration Production Corporation (PVEP), the exploration arm of Vietnam’s state-owned Petrovietnam, for the Lac Da Vang oilfield project with an investment of $700 million.

Murphy Oil has recently received approval from the Vietnamese government to advance a field development plan at the Lac Da Vang oilfield. Lac Da Vang (LDV) is located in Block 15-1/05 of the Cuu Long Basin in the Southeast continental shelf of Vietnam. Murphy Oil estimates LDV’s resources are 80-100 million barrels of oil equivalent gross, and that output could reach 30,000-40,000 barrels a day net with Murphy, said Roger Jenkins, CEO, president and director of the firm.

First Solar

The U.S. major First Solar operates three production sites globally - in Ohio; Malaysia’s Kulim; and Ho Chi Minh City, Vietnam’s southern economic hub. The corporation has invested $830 million in two manufacturing facilities in Dong Nam Industrial Park, Cu Chi district.

First Solar marked a key milestone in Vietnam in early 2018 when it received the first equipment for manufacturing its latest, high-tech Series 6 PV module.

According to First Solar's September analysis, its maximum capacity is 16.5 GW per year, of which Vietnam accounts for the biggest portion of 3.7 GW, on par with that in Malaysia. First Solar eyes to expand its production to 25.2 GW in 2026 and Vietnam will remain the biggest supplier with 3.8 GW.

Boeing

In May, Boeing opened its new permanent Vietnam office in Hanoi as the aerospace giant embarks on its mission to turn the country into a major supplier for the global aerospace industry. “Vietnam is one of our most important countries. It is among our top 20 nations globally,” said Brendan Nelson, president of Boeing Global.

“Boeing is doing everything we can to assist Vietnamese airlines in operations and in the acquisition of new aircraft,” said the top Boeing executive.

In April, Boeing urged Viettel, Vietnam's biggest telecom business, to grow from a tier-3 to a tier-1 supplier, in order to directly supply goods to the U.S. aviation giant.

Vietnam's aviation sector will develop strongly and become better than those in many nations in the next 10 years, Boeing's country director Michael Nguyen told a conference.

Boeing wants to cooperate directly with Vietnamese suppliers as its ongoing collaboration is mostly via Japanese and South Korean partners, he added. Currently, six Vietnam-based businesses are suppliers of components and software for Boeing, of these only one company is Vietnamese.

Apple

The world's biggest tech firm Apple Inc. has relocated 11 audio device factories from Taiwan and mainland China to Vietnam, while many of its suppliers such as Foxconn, Luxshare, Pegatron, Wistron have been enlarging their operations in Vietnam.

Foxconn, the world's largest contract electronics maker and Apple’s biggest contractor with 16 units in Vietnam, recently injected $100 million into its Singapore unit FIT Singapore to add to a new production project in Nghe An province, central Vietnam. The northern province of Quang Ninh in late June granted investment certificates to two projects proposed by Foxconn with total registered capital of $246 million.

In May, Apple launched its online store in Vietnam, offering a full range of Apple products and direct Vietnamese support for customers nationwide. Previously, Apple products in Vietnam were delivered to Apple Authorized Resellers (AARs) by four major firms - Viettel, FPT Retail, Digiworld, and Petrosetco.

The iPhone is among the most popular smartphones in Vietnam. Vietnam spent $3.5 billion on importing smartphones in 2022, with iPhones accounting for the biggest portion of $1.61 billion, or 46.05% of the total, the Ministry of Industry and Trade reported. Total import expenditure on smartphones rose 10.5% year-on-year, while that of Apple's iPhones surged 30.58%.

In August, six Vietnamese banks joined the Vietnam list of lenders supporting Apple Pay as the American tech giant launched the payment service in the country. The lenders are Vietcombank, ACB, Techcombank, Sacombank, VPBank, and MB Bank.