Electronics giants’ shift to Vietnam boosts hopes of domestic industry

Investment shift trend

Vietnam is home to the factories of a number of major technology firms worth billions of US dollars, including Samsung, which manufactures the S and Note series smartphones for domestic and export markets, LG, Canon, and Intel.

Oppo has plans to build a new factory in the northern province of Bac Ninh to expand production and improve competitiveness in the global mobile device market.

While Samsung and LG operate high-tech complexes worth billions of US dollars in the provinces of Bac Ninh and Thai Nguyen, as well as in Ho Chi Minh City and the city of Hai Phong, Sony and Nokia have also built factories in Vietnam. Lenovo has been scouting locations in Bac Ninh and Bac Giang provinces to build factories there. Although Apple has yet to plan iPhone assembly in Vietnam, its major manufacturing partners, including Wistron, Pegatron, Luxshare, and Foxconn, are increasing their production of equipment and accessories in the country. Two months ago, Foxconn officially launched its US$270 million iPad and MacBook production project in Bac Giang Province. Foxconn plans to continue expanding investment in Vietnam and set a target of earning US$40 billion in revenue within the next 3-5 years.

The presence of technology giants in Vietnam has been contributing significantly to development of Vietnam's electronics industry, including the sector’s export development. The industry’s growth indexes will certainly increase rapidly if the investment plans of Foxconn, Pegatron, Luxshare, and LG are implemented as scheduled.

Vietnam’s electronics industry is attractive to investors

Network of potential domestic enterprises

Vietnam has become the world’s 12th largest and ASEAN’s (Association of Southeast Asian Nations) third biggest electronics exporter, but 95 percent of its electronics export value is made by foreign invested enterprises.

The Ministry of Industry and Trade’s Industry Agency has participated in international cooperation activities in the industrial sector, especially electronics and support industries. Specifically, the agency worked with the Republic of Korea (RoK) to build the Vietnam-Korea Technological Consultancy and Solution Center (VITASK). It is discussing with the RoK’s Ministry of Trade, Industry and Energy (MOTIE) coordination with the Korean Association of Machinery Industry (KOAMI) to establish the Vietnam-Korea Machinery and Technology Center (VKMTC) in Ho Chi Minh City.

The Industry Agency worked with representatives from Japan’s Ministry of Economy, Trade and Industry (METI) to prepare plans for cooperation in the automobile, electronics and support industries in the coming years.

The Industry Agency is seeking development opportunities for electronics enterprises expected to boost the domestic electronics market’s development. The agency said it is important to review and improve laws and policies, especially provisions on goods of Vietnamese origin, and expand domestic and export markets.

The Industry Agency said electronics businesses need to identify core, vital products in preparing and realizing development plans and strategies. Enterprises should choose appropriate customers and market segments and study global consumption and technology development trends, said an Industry Agency representative.