Electronics contract manufacturing giant Foxconn and other companies in the sector are ramping up their production plans in Vietnam as part of global supply chain diversification.
A bold move in the wave is an enormous Foxconn production site in northern Vietnam. Authorities in Bac Giang province near Hanoi in January handed out an investment certificate to Foxconn subsidiary Ingrasys (Singapore) Pte. Ltd. to establish a new plant in Quang Chau Industrial Park.
The production site covers around 50 hectares in the IP, and the $62.5 million land leasing deal will run until February 2057.
At the IP, Foxconn has already leased 70 hectares for its facilities and spent a total of $773 million on them, not counting the new production plant, which is expected to create more than 30,000 local jobs, according to Quang Chau IP data. The giant has not disclosed products to be made by the new facility.
Foxconn announced last August an investment of $300 million to expand its manufacturing capacity in northern Vietnam. The Apple supplier is set to first make MacBooks in Vietnam this May.
Electronics contract manufacturers already produce some Apple products in Vietnam, including AirPods, Apple Watch, and some iPad production. By 2025, JPMorgan Chase expects India would make 25% of iPhones and Vietnam 20% of iPads and Apple Watches, 5% of MacBooks, and 65% of AirPods.
Amid the wave of investment into electronics, Apple supplier Goertek Inc. signed a deal on Wednesday to lease 62.7 hectares in the 306-hectare Nam Son-Hap Linh Industrial Park in Bac Ninh province, operated by Kinh Bac City Development Holding Corp.
Goertek entered Vietnam in 2013 with its first project in Que Vo IP in the northern province. After 10 years, Goertek has invested over $625 million there, becoming one of the biggest foreign investors in the northern province and employing 40,000 people, according to provincial data.
Kinh Bac City, listed on the Ho Chi Minh Stock Exchange (HoSE) as KBC, emphasized the new site will help Goertek to manage its production at two locations in Bac Ninh. Goertek’s new project in the province, focusing on consumer electronics, communications equipment, and optics, is set to enter operation in 2024.
Coretronic, a Taiwanese manufacturer of LED backlight units, will kickstart the volume production of its second plant in Vietnam in October this year. The initial output will target TV applications, according to the firm, which announced its fourth quarter 2022 results on Tuesday.
The electronics maker said that its new 20-hectare facility near HCMC, Vietnam’s southern economic hub, would launch such mass manufacturing this October, clarifying its statement in November, which mentioned “the end of 2023”.
Coretronic broke ground for the second plant in Ba Ria-Vung Tau province’s Phu My 3 Specialized Industrial Park in last May. It is operating a $3 million plant in HCMC’s Saigon High-tech Park.
Taipei-headquartered electronics firm Pegatron, an Apple supplier like Foxconn, is building a factory with more than $481 million in investment in the northern city of Hai Phong. Pegatron also has plans to move its R&D center from China to Vietnam at a suitable time, according to the firm.
Luxshare has been an Apple supplier since 2011 and operates six factories in Vietnam where the Taiwanese company produces Apple watches and AirPods, of them it is the world’s largest producer. Luxshare has a total of about 40,000 workers in Vietnam.
Korean tech giant Samsung plans to add a fresh $2 billion investment in Vietnam in future to raise its total in the country to $20 billion. The heavyweight launched a new $220 million R&D center in Hanoi in late December and is working to make it a global hub.