Vietnam is becoming a popular destination for research and development (R&D) among multinationals as the country cements its status as a new global manufacturing hub.
Japan’s Panasonic Corp. is in the process of setting up an R&D center and manufacturing hub for indoor air quality (IAQ) products for Asian markets in southern Vietnam's Binh Duong province; and similar hubs for smart washing machines and refrigerators for Asian markets in Hanoi and nearby Hung Yen province.
These developments are part of Panasonic’s investment portfolio expansions in the Southeast Asian country, which include building a local product development system for wiring devices and lighting as well as (IAQ) systems.
Panasonic is making the investment expansions as part of its long-term commitment to Vietnam, which envisages the Japanese giant as “a major supplier of comprehensive health solutions over the next 50 years” in the country, Panasonic Vietnam CEO Yoichi Marukawa told Vietnamese Prime Minister Pham Minh Chinh at a Hanoi business meeting on September 17, 2022.
At the meeting, he asked the Vietnamese government to support Panasonic on its journey and in training human resources in information technology and artificial intelligence.
In January this year, Hong Kong-based Yadea Technology Group signed a deal to build a $100 million electric motorcycle manufacturing plant and R&D center in Bac Giang province, a gateway to Hanoi. The facility will cover more than 23 hectares in Tan Hung Industrial Park, and have a design capacity of around 2 million units per year, creating 3,500 jobs for locals.
Yadea is a global heavyweight in electric motorbike production with seven manufacturing facilities around the world and an annual capacity of 10 million products. Its products are exported to over 80 countries. It also has three R&D centers.
Samsung, LG operate Vietnam R&D centers
Vietnam has already become an R&D destination for both Samsung and LG and more than a global production hub for the two Korean tech giants.
Samsung has invested about $20 billion in Vietnam to date, and around half of Samsung smartphones are produced in the country. Samsung posted sales of $73.7 billion (almost 95.37 trillion won) in Vietnam in 2022, according to the giant. Its exports from Vietnam were valued at $65 billion last year.
Samsung Group sees 2023 as a significant milestone in Vietnam as it is the Korean giant’s 15th year of massive investments in the country, said Samsung Vietnam CEO Choi Joo Ho. He noted that this year marked an elevation of the importance of Vietnam not only as a manufacturing hub but also as a center for research and development.
Samsung inaugurated its largest Southeast Asia R&D center in Hanoi last December. The $220 million facility houses 2,200 researchers who will carry out projects for mobile devices, network communication technologies, and software, according to the firm.
Its Korean peer LG in 2022 made 15% of its global sets and parts in its Hai Phong cluster, home to manufacturing subsidiaries of LG Electronics, LG Display, and LG Innotek. Hai Phong is about two hours’ drive east of Hanoi.
LG Electronics inaugurated a new R&D facility in Hanoi in March, 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 facility.
The center is responsible for software development and verifying automotive infotainment systems. The company plans to increase the number of development personnel at the new hub by more than 30% by next year to 1,000 from the current 750.
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 electric vehicle-related business and nurture talent.
Vietnam and South Korea have evolved from manufacturing cooperation partners to key research and development partners, South Korea’s President Yoon Suk Yeol said in Hanoi on June 24, the day he wrapped up his three-day state visit to boost economic ties between the two countries.
Yoon’s visit was accompanied by a 205-strong economic delegation, the largest under the current administration, because of Vietnam’s significant market value. The two countries upgraded their relationship to a comprehensive strategic partnership last year.
Car sector
Hyundai Motor Group is also actively carrying out business activities in the growing Vietnamese market, including R&D work.
Korean carmakers Hyundai Motor and Kia, which are under Hyundai Motor Group, unveiled their plans on June 21 to solidify their lead in the rapidly growing Vietnamese market through the release of new models and sales of popular vehicles.
In order to maintain its lead, Hyundai Motor plans to boost sales of the Accent, Creta and Santa Fe models, while developing new SUVs and minivans. In addition, it will start local production of the IONIQ 5 in July to expand its presence in the Vietnamese electric vehicle market.
Kia also plans to boost sales of the Sonet, Carnival, Sportage and K3 models in the Vietnamese market.
Hyundai Motor established Hyundai Thanh Cong Manufacturing Vietnam (HTMV) in 2017 as a joint venture with Vietnamese conglomerate Thanh Cong Group. HTMV has since produced the Grand i10, Avante, Tucson and Santa Fe models at its first plant in the northern province of Ninh Binh. Based on the success of the Hyundai brand, the conglomerate built its second factory in early 2022 and inaugurated the $129 million facility last November.
Kia started manufacturing in Vietnam in 2004 in collaboration with Vietnamese carmaker Thaco. The Thaco Kia manufacturing facility is inside Thaco Chu Lai, a complex of auto assembly, car part and engineering factories in the central province of Quang Nam.
Semiconductor production
Germany-based Infineon Technologies AG, a global leader in automotive, power management, energy-efficient technology, and the Internet of Things (IoT), opened a new center for chip development in Hanoi late this May.
With Vietnam emerging as a key player in the global electronics value chain, this development center will be a vital contributor for Infineon's Design & Enabling Services (DES) ambitious competency growth plans, according to the company.
It will also focus on microcontroller chip verification for automotive applications to support strong growth in the industry.
Infineon plans to recruit 25 staff for its Vietnam team this year, focusing on testing and customizing integrated, analog and digital circuits, automotive vehicle apps, battery management, and balance, among others.
The firm said last October that it and Vietnamese electric car maker VinFast had expanded their electromobility partnership. The duo jointly announced that they would set up an application competence center focusing on electromobility to accelerate VinFast’s development of solutions for the future of smart mobility.