IT companies see Vietnam as new production hub
Vietnam is becoming a new manufacturing hub outside of China for many first-tier IT companies.
During the period 2015-2020, Vietnam’s manufacturing industry saw foreign direct investments from South Korea and Japan totaling US$376 billion with Samsung Electronics contributing one-fourth of the investment amount from South Korea.
Intel established its largest chip packaging factory in Vietnam, while LG Electronics, in 2021, announced to invest over US$1 billion in Vietnam’s Haiphong for expanding its OLED display capacity.
In addition to manufacturing, Samsung Electronics is also constructing an R&D center in Hanoi, while Qualcomm’s only testing laboratory in Southeast Asia is also located in the city. Panasonic and Toshiba are rumored of considering performing R&D in Vietnam.
IT companies began shifting their production to Vietnam in wake of US-China trade tensions and the recent COVID-19 lockdowns in China’s Yangtze Delta cities further prompted the companies especially Apple to accelerate their paces.
Vietnam so far has a total of 335 industrial parks with a total size of 100,000 hectares and has continued expanding more industrial parks to satisfy rising demand from foreign investors.
Figures from Vietnam’s Association of Foreign Invested Enterprises (VAFIE) show foreign direct investment account for the highest share in total capital inflow with the percentage growing from 2019’s 44% to 51.34% in 2022 and slipping to 48.9% in 2021.
Vietnam’s new registered capitals have also been picking up every year with the average amount per project rising from 2019’s US$4.3 million to 2020’s US$5.8 million and 2021’s US$8.8 million.
By Alex Chen & Joseph Tsai – Digitimes.com – June 24, 2022