Vietnam progresses as electronics manufacturing hub
Vietnam is emerging as Apple’s next production hub while other giant electronics makers are accelerating their buildup in the tech-savvy nation to diversify supply chains.
Apple plans to start producing MacBook models in the Southeast Asian country for the first time next year, as early as around May, according to a new report from Nikkei Asia.
The article, citing insiders, says that Apple has tapped its supplier Foxconn to make MacBooks in Vietnam. The Taiwanese manufacturer received a license in early 2021 to build a new $270 million plant in Vietnam, designed to produce MacBooks and iPads.
Apple's supply chain diversification to Vietnam began with AirPods, which entered mass production here in 2020. Its latest move means its products made in Vietnam include MacBooks, iPads, AirPods, and Apple Watches.
The giant is also said to be potentially moving HomePod production to the country, according to a report from CNBC on December 20, which said Apple was reportedly in talks in August to move some production for its Apple Watches, MacBooks, and HomePods to Vietnam.
Foxconn signed a deal in Vietnam this August to rent an additional 50.5 hectares of land in Quang Chau Industrial Park in Bac Giang province near Hanoi. The Apple supplier plans to develop a new project with an investment estimated at some $300 million but has not disclosed what it would manufacture.
At the IP, Foxconn has so far leased 70 hectares for its facilities and spent a total of $773 million on them, not counting the upcoming project, which is expected to create more than 30,000 local jobs, according to Quang Chau IP’s data.
Compal Electronics, a supplier to Apple, Amazon, and Dell, signed a deal on December 16 to lease 40 hectares of land in Thai Binh province for its new $260 million investment to build a new factory. The facility’s annual capacity will include 2.1 million smartwatches, 70,000 cable modems, 100,000 wireless wi-fi routers, 10,000 5G network frequency modules, 1.1 million Internet of Things (IoT) devices, 1.25 million tablets, and others.
Last year, Compal expanded its Vietnam production by adding more manufacturing capacity to its existing facility in Vinh Phuc province, a neighbor of Hanoi.
Compal is a key manufacturer of the iPad and Apple Watch, Google’s Pixel phone, and Amazon’s Echo smart device.
Meanwhile, South Korean electronics giants Samsung and LG plan to channel billions of U.S. dollars of additional investment into Vietnam.
As the largest single foreign investor in Vietnam, Samsung Electronics will raise its total investment in the country to $20 billion from $18 billion, Samsung Electronics CEO Han Jong-hee told visiting Vietnamese President Nguyen Xuan Phuc in Seoul on December 6.
The additional investment would go to advanced areas like artificial intelligence and big data, as well as developing human resources, Han said.
LG will also invest $4 billion more in Vietnam to make the nation a smartphone camera production hub for the giant, LG Corp. vice chairman and CEO Kwon Bong-seok told the Vietnamese president on December 5, also in Seoul.
LG has so far invested $5.3 billion in Vietnam to produce electronics, home appliances, displays, cameras, and car parts.
Vietnam and South Korea announced on December 5 that the two countries upgraded their relations to a “comprehensive strategic partnership”. Vietnam’s President Phuc and his South Korean counterpart Yoon Suk Yeol reaffirmed the goal of raising bilateral trade to $100 billion by 2023 and working towards $150 billion by 2030 in a “balanced direction”.
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.
Meanwhile, Samsung Group had earlier planned to inaugurate its own Vietnam R&D center worth $220 million, located in Hanoi, this December.
As earlier planned, Samsung Electronics executive chairman Lee Jae-yong was slated to pay a working visit to Vietnam late this month to seek new investment opportunities, according to South Korean industry sources. His planned working trip also aims at strengthening the tech giant’s global management, according to a The Korea Times report on October 31.
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.
Vietnam has over the last decade emerged as one of the most attractive production hubs for electronics companies, though it was previously known as a center for manufacturing textiles, garments, and shoes.
Amkor Technology Inc., headquartered in Tempe, Arizona, the U.S., 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 in Bac Ninh province near Hanoi.
American giant chipmaker Intel has so far invested $1.5 billion in Vietnam since its 2006 inception here, making it the largest U.S. technology investor. The major’s Intel Products Vietnam Co. Ltd. in HCMC is the largest assembly and test manufacturing facility in the Intel assembly and test network worldwide.
Intel has plans to enlarge business and investment in Vietnam, its CEO Patrick Gelsinger told Vietnamese Prime Minister Pham Minh Chinh in Hanoi late this May.
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