Vietnam 'darling' of global electronics giants
Continual business expansion among major foreign electronics manufacturers in Vietnam are fueling industry development and luring new capital sources.
Previously known as a center for manufacturing garments and shoes, the tech-savvy country has emerged as a leading hub for electronics manufacturing in Southeast Asia. It is now home to facilities of Samsung, LG, Intel, Amkor Technology, Panasonic, Canon, Foxconn, Pegatron, Goertek, Luxshare, Wistron, Foster Electric, among others.
Key export earner
In the first three months of the year, Vietnam’s exports of electronic products, computers and components expanded 10.1% year-on-year to $13.2 billion, accounting for 14.9% of the country’s total export value, according to the General Statistics Office. The key buyers remained the EU, the U.S. and China, with the value from shipments to the U.S. soaring 17.2% to almost $3 billion.
Official data showed Vietnam in 2021 posted a total export value of $50.83 billion from electronic products, computers and components, increasing 14% year-on-year and accounting for over 15% of the country’s total export revenue.
Korean duo
Samsung Vietnam now operates six production facilities in Bac Ninh, Thai Nguyen in the north and Ho Chi Minh City in the south, a research and development (R&D) center and a sales entity in Hanoi. It is mulling over investments in Da Nang city, central Vietnam’s economic hub.
“The country is planned to be a key production hub and a strategic center for research and development of Samsung,” Samsung Vietnam CEO Choi Joo Ho said.
In Thai Nguyen, Samsung Group is investing another $920 million in the Samsung Electro-Mechanics Vietnam Company facility, raising its total investment in the plant to $2.27 billion. By the end of 2021, Samsung Vietnam’s total accumulated investment capital had reached $18 billion (not including this $920 million), equal to 102% of the investment capital approved by the group for Vietnam as of 2020.
In Samsung Group’s long-term strategy, Vietnam is moving beyond its status as a significant global manufacturing base and evolving into a strategic R&D hub. The Korean tech giant plans to launch its own $220 million R&D center, not a Samsung Vietnam facility, in Hanoi by the end of this year, concentrating on emerging global technological trends like AI, big data, and Internet of things.
LG Group, its Korean peer, selected Hai Phong as its strategic spot in Vietnam. The major industrial and port city, about two hours’ drive east of Hanoi, is home to three companies under the LG roof. LG Electronics Vietnam Hai Phong focuses on electronics, LG Innotek Vietnam Hai Phong supplies electronic components, while LG Display Vietnam Hai Phong manufactures LCD and OLED displays. The last received another $1.4 billion investment last August, bringing the total capital for the facility to $4.65 billion.
LG Display Vietnam Hai Phong's CEO SuK Myung said at a ceremony held to receive the certificate for the additional investment that his company was committed to making efforts to soon put the project into full operation.
Manufacturers for Apple
Also in Hai Phong, Taiwan-based Pegatron, a supplier of Apple, Microsoft and Sony, got a license in February to build a $68.3 million housing project in the Dinh Vu-Cat Hai Economic Zone for its workers. It is designed to accommodate 10,000 employees.
At the same time, Universal Scientific Industrial Vietnam Co., a unit of leading Taiwanese semiconductor manufacturer ASE Technology, was permitted to build a $18.34 million housing project for 4,000 workers in the zone.
Pegatron in September 2020 announced its plans to invest $1 billion in three hi-tech product plants at the Nam Dinh Vu Industrial Park in Hai Phong to make computers, electronic devices, communications equipment, electronic components and circuit boards for global tech giants. The first plant is already operational.
Similarly, Universal Scientific Industrial Vietnam of ASE started production at its $200 million facility in Hai Phong last September.
Currently, the International Finance Corporation (IFC) is considering a five-year senior loan of up to $700 million, with a one-year grace period, to two Vietnamese subsidiaries of Chinese electronics components maker Goertek Inc. The World Bank's investment arm said it had earlier proposed the loan for the expansion of an existing production base of Goertek in Bac Ninh province, next to Hanoi, and a facility under construction in the central province of Nghe An.
However, the Apple supplier is pushing ahead with both projects while waiting for IFC disbursements. Goertek Technology Vina Ltd. in Bac Ninh was allowed by the provincial administration this March to raise its investment capital to $565.7 million from $260 million. Its CEO Yoshinaga Kazuyoshi said his company, which produces electronic devices, network equipment and multimedia audio products, now employs over 30,000 workers. Last year, its revenue soared by 20.4% to $3.28 billion despite the pandemic.
As for Goertek Precision Industry Vietnam Ltd. in the central province of Nghe An, Goertek in January decided to add $400 million to the $100 million manufacturing facility, making it the largest foreign-invested project in the province.
Goertek Inc. is a leading global leading manufacturer of acoustic components and audio consumer electronic products like earphones, smart watches, and loudspeakers. It is headquartered in China’s Shandong province and listed on the Shenzhen Stock Exchange. The company is one of the three key suppliers for Apple in Vietnam, along with Foxconn and Luxshare.
Shenzhen-based Luxshare Precision Industry set up its Vietnam subsidiary last February. The facility, located in the northern province of Bac Giang, started manufacturing the iPhone 13 in the third quarter last year. Luxshare operates two other manufacturing facilities in Nghe An, with about 7,000 workers at present.
Notably, Bac Giang is home to the $270 million Fukang Technology Company factory of Foxconn, the world’s largest contract electronics maker. The Taiwanese group reportedly invested $700 million in Vietnam last year after having poured $1.5 billion into the country by the end of 2020. It also operates factories in Bac Ninh.
Taiwan-based Wistron, a manufacturing partner of Apple, has so far invested about $300 million into Vietnam and is operating only one facility in Ha Nam province, about 50 kilometers south of Hanoi. Wistron Infocomm Vietnam manufactures displays, computer peripherals and devices, but is not yet an Apple supplier.
American fair
Bordering Hanoi, Bac Ninh is where U.S.-based Amkor Technology Inc., a global semiconductor product packaging and test services provider, is investing as much as $1.6 billion until 2035 to build a state-of-the-art facility as an important part of the American corporation’s worldwide network. Having promised full support for the American major, the provincial administration gave the green light to the mammoth project last November.
“This is a strategic, long-term investment in geographical diversification and factory capacity expansion, supporting the company’s commitment to reliable supply chain solutions for our customers. Factory utilization is high, particularly at our advanced packaging sites, and we expect the strong market demand for assembly and test solutions to continue," said Giel Rutten, Amkor’s president and CEO.
"Investing in Bac Ninh expands our manufacturing footprint in support of customer need for an alternative cost-competitive supply chain solution for Advanced SiP – and for other packaging solutions in the future.
“Support from Bac Ninh and a strong labor force make Bac Ninh an excellent choice for this expansion, and we expect this new facility to become an important part of our assembly and test network in the future.”
Meanwhile, American giant chipmaker Intel did not choose the north or central Vietnam for its facilities but Ho Chi Minh City, the country’s southern economic hub. Intel has so far invested $1.5 billion in Vietnam since its 2006 inception here, making it the largest US technology investor.
With such capital, Intel Products Vietnam Co. Ltd. is the largest assembly and test manufacturing facility in the Intel assembly and test network worldwide. Intel has been mulling over new investments for Vietnam, but the global pandemic and worldwide shortages of semiconductor chips may have caused some delays, according to insiders.
- Read More
Vietnam invites state-owned Chinese giant to join $67 bln high-speed railway project
Vietnam’s Commission for the Management of State Capital at Enterprises (CMSC) has invited China State Construction Engineering Corporation (CSCEC) to participate in and "make contributions" to the country’s $67-billion cross-country high-speed railway project.
Infrastructure - Fri, October 25, 2024 | 7:35 pm GMT+7
Vietnam National Assembly Office Chair unexpectedly steps down
Vietnam’s National Assembly (NA), the country's supreme legislative body, has unexpectedly relieved Bui Van Cuong from the post of its General Secretary.
Politics - Fri, October 25, 2024 | 7:19 pm GMT+7
Vietnamese lender MSB owned 34% by 9 major shareholders holding over 1% stake each
A total of 33.69% of Vietnam Maritime Commercial Joint Stock Bank, or MSB, is held by nine institutional shareholders who own an over 1% stake each, according to its updated list of shareholders.
Banking - Fri, October 25, 2024 | 4:24 pm GMT+7
Belarus seeks cooperation with Vietnam in manufacturing automobiles
Belarus wants to collaborate with Vietnam in manufacturing automobiles for export, President Aleksander Lukashenko said to his Vietnamese counterpart Pham Minh Chinh at a Thursday meeting on the sidelines of the BRICS Summit.
Industries - Fri, October 25, 2024 | 4:08 pm GMT+7
Tran Cam Tu promoted to permanent member of Vietnam Party Central Committee’s Secretariat
Tran Cam Tu, a member of the Politburo and the Party Central Committee's Secretariat, was appointed permanent member of the Secretariat by the Politburo on Friday.
Politics - Fri, October 25, 2024 | 3:56 pm GMT+7
SeABank offers comprehensive financial solutions to support import-export businesses
SeABank has developed a diverse range of flexible financial products to help import-export enterprises optimize cash flow and ensure smooth operations.
Companies - Fri, October 25, 2024 | 3:34 pm GMT+7
SeABank empowers women-owned businesses with exceptional benefits and specialized support
To support and facilitate the growth of women-owned enterprises, SeABank has introduced a range of exclusive programs and specialized financial products, reinforcing its goal of becoming a trusted financial partner for women-owned businesses in Vietnam.
Companies - Fri, October 25, 2024 | 3:22 pm GMT+7
Singaporean investment fund Makara Capital seeks investment opportunities in Hanoi
Singapore-based capital firm Makara Capital hopes to put its extensive experience in infrastructure, innovation and energy projects to use in Hanoi, CEO Ali Ijaz Ahmad said on Thursday.
Investing - Fri, October 25, 2024 | 3:13 pm GMT+7
Daughter of Masan Group chairman plans to spend $30-plus mln on MSN shares
Nguyen Yen Linh, daughter of Masan Group chairman Nguyen Dang Quang, has plans to spend at least $30 million on acquiring 10 million shares of the group, listed on the Ho Chi Minh Stock Exchange as MSN.
Companies - Fri, October 25, 2024 | 2:55 pm GMT+7
VAFIE works to boost Chinese investment in Vietnam
The Vietnam’s Association of Foreign Invested Enterprises (VAFIE) worked with an industry-trade delegation from China's Chongqing city at a Friday seminar to boost investment ties between the two countries.
Companies - Fri, October 25, 2024 | 1:56 pm GMT+7
Vinhomes buys back another 10 mln shares on Thursday as stock nosedives
Vinhomes JSC, the largest residential housing developer in Vietnam, bought another 9.95 million shares on Thursday, the second day of its mega buyback scheme, while its stock price continued going south.
Finance - Fri, October 25, 2024 | 11:36 am GMT+7
USD/VND exchange rate to stabilize soon amid Fed’s rate cut cycle: experts
The increase in the USD/VND exchange rates since early October is largely seasonal and is expected to ease soon as the U.S. Federal Reserve (Fed) is set further cut interest rates, according to experts.
Banking - Fri, October 25, 2024 | 10:52 am GMT+7
Putin, PM Chinh agree to intensify oil-gas cooperation
Russian President Vladimir Putin and Vietnamese Prime Minister Pham Minh Chinh have agreed to continue promoting the expansion of activities by Vietnamese and Russian oil and gas companies in each country.
Economy - Fri, October 25, 2024 | 9:46 am GMT+7
Vietnam developer Sonadezi gets $14 mln land lease advance from Taiwanese firm
Vietnamese developer Sonadezi has obtained a VND359.4 billion ($14.2 million) short-term advance on leasing land and industrial park facilities from Taiwanese-invested Electronic Tripod Vietnam Company Limited.
Industrial real estate - Fri, October 25, 2024 | 7:50 am GMT+7
Singapore grants conditional approval for solar power import from Australia
Singapore has granted conditional approval to Sun Cable (Singapore) Assets to import low-carbon electricity from Australia.
Southeast Asia - Thu, October 24, 2024 | 10:40 pm GMT+7
Cambodia, China team up to boost innovation, digital economy
Cambodia and the China-ASEAN Information Harbor Co., Ltd. (CAIH) have signed a memorandum of understanding (MoU) to boost technological innovation, digital infrastructure, and digital economy.
Southeast Asia - Thu, October 24, 2024 | 10:39 pm GMT+7