Vietnam-South Korea business ties to strengthen at landmark forum

South Korean companies, including global giants Samsung, LG, and SK Group, will attend the Vietnam-Korea business forum in Hanoi on June 24 along with more than 200 other firms to further expand bilateral economic ties.

South Korea President Yoon Suk Yeol will attend the event as part of his state visit to Vietnam from June 22-24 to boost the two countries’ multi-faceted relations, marking his first trip to an Association of Southeast Asian Nations (ASEAN) member.

Yoon's largest-ever economic delegation will include Samsung Electronics executive chairman Lee Jae-yong, SK Group chairman Chey Tae-won, Hyundai Motor Group executive chairman Euisun Chung, LG Group chairman Koo Kwang-mo, Lotte Group chairman Shin Dong-bin, and other top Korean business figures.

Choi Sang-mok, South Korea’s senior presidential secretary for economic affairs, provided the names of the top business figures at a press briefing in Seoul on Tuesday. According to him, the major business forum will be attended by some 500 businesspeople from the two countries, and the South Korean President will reflect on economic achievements and a partnership vision for the next 30 years, which includes enhancing trade vitality and advancing cooperative relations.

Choi stressed that Yoon’s state visit to Vietnam, Korea's third-largest trade partner, will focus on expanding services and infrastructure exports, supporting the solidarity of future generations of the two countries, and strengthening digital leadership.

Yoon’s agenda also includes meetings with Vietnam's top leadership, including Party General Secretary Nguyen Phu Trong, Prime Minister Pham Minh Chinh, and State President Vo Van Thuong, in order to discuss ways to deepen bilateral relations that were upgraded to a comprehensive strategic partnership last year.

During his three-day working trip, the two sides are also expected to sign a series of memoranda of understanding in areas including supply chain cooperation such as rare metals, infrastructure exports, and new industrial technology, according to the South Korean president’s office.

He will also attend a series of business events, meet with young researchers and entrepreneurs working at the new Samsung R&D Center in Hanoi and the Hanoi-based Vietnam-Korea Institute of Science and Technology, which was established as an official development assistance project.

Samsung Electronics executive chairman Lee Jae-yong launched the new $220 million R&D Center in the Vietnamese capital in December 2022. The electronics giant is turning the facility into a global R&D hub for its new-generation products.

Samsung is the biggest Korean investor and the largest single foreign investor in Vietnam with total registered capital of nearly $20 billion. More than half of Samsung smartphones are made in Vietnam. Meanwhile, LG Electronics is ramping up R&D in Vietnam to serve its rapidly growing electric vehicle-related business by inaugurating an R&D facility also in Hanoi this March.

Choi, South Korea’s senior presidential secretary for economic affairs, noted that around 9,000 Korean companies in Vietnam are the "backbone of economic cooperation" between the two countries, contributing to the creation of 700,000 local jobs and to Vietnam's exports and GDP.

The two countries have set a goal of achieving $150 billion dollars in trade by 2030. On the occasion of the South Korean president’s state visit, the two nations expect to expand the horizon of cooperation to new fields such as core mineral supply chains, new and renewable energy, innovative science and technology, and smart cities, Kim Tae-hyo, Korea’s principal deputy national security adviser, said, when outlining the details of Yoon's trip at the Tuesday press briefing in Seoul.

SK Group, South Korea’s second-largest conglomerate, is going all-out to secure funds for facility investments in the semiconductor and battery sectors, the giant told an expanded management meeting for the second half of this year in Seoul on Thursday.

The meeting was presided over by the group’s chairman Chey Tae-won, who is among the top Korean business figures attending next week’s forum in Hanoi.

SK Group’s SK Hynix, the world’s second-largest memory chipmaker, recorded a cumulative loss of 5 trillion won ($3.94 billion) over two consecutive quarters, raising concerns about financing.

According to a recent report by the Bank of Korea (BOK), Vietnam is quickly becoming a significant market for South Korean semiconductor makers, who have been grappling with lackluster demand in China. As tensions between the U.S. and China accelerate, the bank emphasized the importance of diversifying export markets for industry giants like Samsung Electronics and SK Hynix.

The BOK underlined Vietnam’s emergence as a new source of demand for South Korean semiconductors, highlighting the Southeast Asian country’s growing status as an international hub for IT device production and potentially positioning it as an alternative to China.

Vietnam’s abundant low-wage workforce and its proximity to the Chinese market are attracting global businesses, including South Korean firms, to establish manufacturing facilities in the new global production hub, according to the BOK report.

On Monday, SK Group’s SKC Co., a manufacturer of advanced materials, signed a preliminary agreement with Vietnam's Hai Phong city to explore potential investment in advanced materials for semiconductors, secondary batteries, and other green sectors. SKC said it will consider ways to invest in Hai Phong, a major port city and logistics hub in the north, as a site for the Korean firm’s expansion into high-tech materials.