LG Electronics to power up auto parts R&D in Vietnam

LG Electronics said Thursday it is ramping up research and development in Vietnam to serve LG’s rapidly growing electric vehicle-related business, following its Korean peer Samsung Electronics's launch of a $220-million R&D center in Hanoi in late December.

LG Electronics inaugurated a new R&D facility in Hanoi on Wednesday, saying the new facility will further nurture its existing auto parts-focused R&D center, which the Korean tech giant has been running since 2016. LG did not reveal the investment for the new center.

The new Hanoi R&D center focuses on software development and inspection of in-vehicle products, including telematics, and audio, video and navigation devices, LG said. They are called in-vehicle infotainment (IVI) systems.

“We will continue to provide mobility solutions that deliver differentiated value to our global auto industry customers,” said Lee Sang-yong, senior vice president of R&D Laboratory at LG Electronics Vehicle component Solutions (VS) Company.

“By boosting our infrastructure to the next level, LG will continue to further enhance our capabilities and develop next-generation, innovative mobility solutions,” he added.

The heavyweight expects the new entity to strengthen its R&D infrastructure and competitiveness in Vietnam, saying it will increase the number of developers in the country by more than 30% to 1,000 by next year.

According to market research firm Strategic Analytics, LG is leading the global market for IVI systems with a 23% share as of the third quarter of 2022. The company has now recorded a double-digit share of the IVI market for two years consecutively.

LG has continuously strengthened its R&D capabilities in Vietnam for automotive parts since it established the Hanoi R&D Center under its Vietnam Production Corporation in 2016. With the success of the first center, the company created an additional R&D branch office in central Vietnam’s Danang city in 2020 to enhance its EV-related business and nurture talent.

The electronics giant says it considers its EV-related business one of the most promising growth sectors. In the fourth quarter of 2022, LG reported a significant drop in operating profit due to slowing demand for home appliances, but its EV parts business made a turnaround 10 years after its inception.

Since 2021, LG has been operating programs in collaboration with Vietnamese universities to help foster talented, young locals seeking careers in software development. These include the awarding of academic scholarships and guaranteeing employment for high-performing students at universities in Danang and neighboring provinces. The program is slated to expand to universities in Hanoi this year.

Vietnam as electronics production base

LG plans to channel another $4 billion into Vietnam, LG Corp. vice chairman and CEO Kwon Bong-seok said in Seoul on December 5, 2022 as Korean and Vietnamese leaders stated they upgraded the two countries’ ties to a comprehensive strategic partnership on the occasion of the 30th anniversary of bilateral relations.

Kwon said LG has been present in Vietnam since 1995 and invested about $5.3 billion in the country until that time. LG Display currently plans to expand its 45-hectare factory in the northern Vietnamese city of Hai Phong and is seeking recruitment support from the Vietnamese labor ministry.

Samsung Electronics launched its $220-million R&D center in Hanoi in late December and is on the way to making it a globally leading hub in research and development. Like LG, the new facility will also help further develop technology talent in Vietnam.

Samsung is in a position to accelerate training by providing scholarships and internships for promising tech students and strengthening cooperation with universities across the country, Samsung Vietnam CEO Choi Joo Ho said.

China’s Sunny Optical Technology, a supplier to major Chinese smartphone brands like Oppo, Huawei, and Vivo, is preparing to invest an additional $2.5 billion to build a manufacturing complex in northern Vietnam’s Thai Nguyen province, already home to Samsung’s Vietnam-based largest smartphone manufacturing facility, which is Samsung Electronics Vietnam Thai Nguyen, or SEVT.

Sunny Optical is operating four production plants in Vietnam, with combined investment capital of $130 million.

Taiwanese tech giant Foxconn is preparing to make MacBooks for Apple Inc. for the first time in Vietnam, starting this May.

Coretronic, a Taiwanese manufacturer of LED backlight units, will kickstart the volume production of its second plant in Vietnam in October this year.

Taipei-headquartered electronics firm Pegatron, an Apple supplier like Foxconn, is building a factory with more than $481 million in investment in Hai Phong. Pegatron also has plans to move its R&D center from China to Vietnam at a suitable time, according to the firm.