Vietnam preferred relocation destination for US tech firms amid China curbs: expert

American tech companies are increasingly viewing Vietnam as the place to relocate their production facilities and transfer technology, particularly in the electronics industry, due to the ongoing U.S.-China rivalry.

Speaking at an economic seminar on Monday, Vu Tu Thanh, deputy regional managing director of the U.S.-ASEAN Business Council, cited tech consultants as saying that for several decades, China was their principal destination for production establishments for both civilian and military purposes.

However, U.S. tech controls are hindering them from moving to China now.

Thanh said that the companies still have huge needs to invest overseas.

He expressed disappointment that Vietnam was not ready to cooperate with the U.S. within the framework of the Developing Electronics & Leading Technology Advancement Partnerships (DELTA) Network, part of the bilateral comprehensive strategic partnership established during President Biden’s Hanoi visit last September.

Thanh said that the U.S. government wanted to pilot the DELTA Network in Vietnam first before expanding to other partners.

“It’s a pity that Vietnam was not ready to discuss cooperation in this network during the first Vietnam-U.S. Economic Dialogue last month for lack of preparedness.”

He said the network had the potential to create opportunities for Vietnamese electronics firms to make strategic products like light or short-range drones and AI-integrated surveillance cameras.

Thanh noted that the world’s short-range drone market was valued at over $63 billion in 2023, with 80% of market share held by China. In the future, China cannot export such products to the U.S. or other countries that are sensitive to security risks that they perceive from China-made drones.

“This is an opportunity for Vietnam. Vietnamese companies can replace Chinese counterparts to provide such products,” he added.