Sputnik: Why global technology giants favour Vietnam?

Assembling smartphones at Samsung Electronic Vietnam Thai Nguyen, Yen Binh Industrial Park, Thai Nguyen province. (Photo: VNA) 

Hanoi (VNA) – Northern Vietnam has attracted many international giants, especially those in electronics, thanks to its complete infrastructure.  

Sputnik news agency cited Cushman & Wakefield, one of the world's largest commercial real estate services firms, as saying that as the global manufacturing industry is looking to diversify its supply chains to avoid dependence on one country, along with favourable geographic conditions and attractive investment policies, the North of Vietnam is fully capable of becoming an 'extended arm' of the world's factory and the global centre for the production of electronic components. 

Why do the world's electronics giants like Apple, Samsung, Intel and LG choose Vietnam for their investment? 

Sputnik quoted a recent article by Cushman & Wakefield, explaining why Vietnam attracts attention and is emerging as a new hub of production, processing and manufacturing.

According to Cushman & Wakefield, northern Vietnam has attracted many big electronic companies worldwide with a favourable location near major economies and good infrastructure connectivity. 

It said the North currently has 13 highways connecting the northern provinces to Hanoi, totalling 895.8km. The road network covering the whole territory acts as the main connection for the transport network between industrial zones, airports, seas, border gates, and important traffic hubs. 

Besides, according to the road network planning for 2021-2030, it is expected that the North will have 14 expressways with a total length of about 2,300 km and 4 to 6 lanes. 

The region also has six railway routes: the Hanoi - Hai Phong, Hanoi - Lao Cai, Hanoi - Dong Dang, Hanoi - Quan Trieu, Kep - Luu Xa, Kep - Uong Bi - Ha Long and the North-South axis. 

As for air transport, the North has seven passenger airports, namely Noi Bai, Van Don, Cat Bi, Tho Xuan, Vinh, Dien Bien, and Dong Hoi, of which Noi Bai international airport has a specialised cargo terminal with a capacity of 403,000 tons of cargo per year, according to the Ministry of Transport.

Regarding sea transport, Cushman & Wakefield noted that the North has the strongest increase of 154% from 2017 to 2021 in exports through seaports, compared to the rest of the regions.

Another advantage of the region is its convenient geographic location. Sputnik said its adjacency to China, the world's top manufacturing hub, makes it more appealing to world electronic giants and foreign investors when they consider shifting their production bases.  

"The North of Vietnam has a direct road, sea, and rail route connecting to Shenzhen, known as China's Silicon Valley, creating favourable conditions for businesses wishing to expand and diversify production in the region," Sputnik said, quoting Cushman & Wakefield's writings. 

A production chain at a factory in VSIP Bac Ninh (Photo: VNA)

Cushman & Wakefield cited the Vietnamese Ministry of Planning and Investment statistics, which showed the first nine months of 2022 saw a total registered FDI capital of nearly 18.8 billion USD. Bac Ninh is third in the country, with a total registered capital of nearly 1.78 billion USD, accounting for 9.5% of total capital. Thai Nguyen, Hai Phong, Hanoi, and Bac Giang followed as the provinces to have attracted the most FDI inflows in recent years.

Industrial parks in the North received a wave of investment from global electronics enterprises from early on, such as Panasonic (1971), LG Display (1995), Canon (2001), Foxconn (2007), Samsung (2008), Fuji Xerox (2013). More recently, corporations such as Pegatron, Goertek, and Jinko Solar, the article of Cushman & Wakefield said. 

"With favourable geographical features, coupled with strong investment in infrastructure and a series of policies to promote investment from the Government, it can be said that the North of Vietnam has what it takes for "queen bees" to nest and further contribute to Vietnam's GDP," according to Trang Bui, General Director of Cushman & Wakefield./.