Investors expand operations as Vietnam turns global electronics hub

Vietnam’s position in the global supply chain as an electronics provider has been bolstered as world leaders like Samsung expand their operations in the country.

The nation’s burgeoning manufacturing sector has continued to attract foreign companies, especially suppliers of electronics, computing equipment, integrated circuits, and home appliances.

The most prominent example of this is South Korean conglomerate Samsung’s continuous expansion of its base here. Today, about 60% of Samsung smartphones are made in Vietnam and the group has invested more than $20 billion as of June 2022, about 28 times higher than its initial commitment.

The total investment does not include the $220 million that Samsung is channelling into its own R&D center (not Samsung Vietnam’s operational R&D center) that is being built in Hanoi and scheduled to open by the year-end. The facility, the group’s largest in Southeast Asia, is set to employ 3,000 engineers. It will focus on development work for 5G networks, artificial intelligence, Internet of Things, Big Data, and other tech solutions.

Panasonic gets bigger

Japan’s Panasonic has said it will accelerate expansion of its electrical construction materials business in Vietnam to increase sales by approximately 3.5 times over the next decade, an increase of $365 million.

Panasonic Electric Works Co., a member of the Japanese tech giant, announced the expansion at its July 12-15 exhibition in Ho Chi Minh City. The exhibition aimed to demonstrate the new company’s capabilities in modern housing and strengthen relationships with co-creation partners in Vietnam.

The firm said it will respond to growing demands of the housing and construction market in Vietnam with its three main strategic planks: building a local product development system; strengthening local production capacity of wiring and indoor air quality (IAQ) devices; and proposing solutions across the product categories jointly with local companies.

“We deploy globally a wide range of electric construction material and provide solutions to social issues in various countries, and one of the most important countries for our future business growth is Vietnam. Therefore, we expect to grow together by offering a variety of products to fulfil the very positive demand in Vietnam’s market,” said Matsumoto Wataru, the company’s regional chairman.

Panasonic Electric Works Vietnam CEO Kazuhiro Takeuji said: “In the future, we will further strengthen the manufacturing structure of existing businesses and build local development bases plus lighting to launch a wider range of products.

“We will continue to provide secure, safe and comfortable lives to Vietnamese people through the synchronization of all processes like development, manufacturing and sales,” he added.

To rapidly develop products that respond to local issues and needs, the company will gradually establish a new product development and planning organization for the local market in wiring devices, lighting, and IAQ categories, he reiterated.

Panasonic Electric Works Vietnam, formerly called Panasonic Life Solutions Vietnam and established in January 2013, specializes in manufacturing and trading wiring devices, circuit breakers, IAQ devices, pumps, fans, lighting products, and home appliances.

Xiaomi supplier won’t wait

Hong Kong-based DBG Technology, a contract manufacturer for major Chinese smartphone brands like Xiaomi, Honor and Huawei, plans significant expansion of its overseas production capacity. In Vietnam, DBG started work last year on its $80 million factory in Thai Nguyen, designed to supply three million handsets a month in three years. The northern province is also home to Samsung smartphone manufacturing lines.

Without waiting for the planned three years, DBG started supplying made-in-Vietnam Xiaomi handsets last month, making the first deliveries available in the domestic, Malaysian and Thai markets. The first product batches also evidenced justified Xiaomi’s desire to expand to Southeast Asia with Vietnam as its production base.

Also this June, U.S. giant Apple moved some of its iPad production from China to Vietnam. Its supplier BYD has begun commercial production of iPads at a $270 million factory in Phu Ha Industrial Park, Phu Tho province.

At present, U.S. tech giant Google is considering having its future Pixel phones produced in Vietnam. The production line for Google’s new smartphones in Vietnam is likely to be established after 2023.

America’s UL opens new Vietnam lab

UL Solutions, a world leader in applied safety science, has officially opened a new laboratory in Hai Duong province. The U.S.-based company’s second Vietnam laboratory services a diverse range of products for customers across multiple industries, including consumer electronics, wire and cable, information technology equipment, lighting and small appliances.

“UL Solutions is dedicated to using its testing and certification expertise to help manufacturers in Vietnam open new markets, forge partnerships and succeed in an increasingly competitive marketplace,” UL executive vice president Sajeev Jesudas said in a release.

The laboratory, 45 kilometers from Hanoi, is located in the VSIP Hai Duong Industrial Park. It houses testing facilities for engineered materials, wire and cable, appliances, lighting, refrigeration and consumer technologies.

“Adding testing capabilities in Vietnam will strengthen our ability to help customers export products to destination markets while meeting safety and performance testing and certification needs in Vietnam,” said Sok Mei Wong, regional vice president, ASEAN, Australia and New Zealand.

The company opened its first Vietnam testing laboratory in Ho Chi Minh City in 2016 as domestic and multinational manufacturers sought further integration into the global supply chain.