US newspaper: Vietnam more attractive to overseas investors hinh anh 1Garment production in Lai Vu Industrial Park in Hai Duong province. (Source: VNA)

Vietnam is emerging as a more attractive destination for overseas investors, the Los Angeles Times, a US-based daily newspaper, said in an article on October 8.

Vietnam, a country where millions of people still subsist on farming, received a major boost from Silicon Valley a decade ago when chip maker Intel launched a semiconductor factory in the nation, the largest American investment in the country at that time.

The firm’s 1.04-billion-USD assembly and manufacturing plant added more complex products to the mix, such as central processing units and chip systems, and sent some of its 1,000 Vietnamese employees to the US for training.

Vietnam has since positioned technology at the centre of its growth and development goals, said General Manager of Intel Vietnam Sherry Boger, adding that the Intel facility and the technology ecosystem in Vietnam is climbing up the value chain.

Today, foreign direct investment (FDI), led by Japan, Taiwan and the Republic of Korea, constitutes about one-fifth of the country’s gross domestic product (GDP).

Singtex, a Taiwan-based hi-tech fabric producer, established a factory in Ho Chi Minh City last November and employs more than 400 local workers. Low labour costs and expectations that the Trans-Pacific Partnership (TPP) will help expand its business are among the reasons behind the decision, President Jason Chen said.

However, Vietnam is also facing fierce production competition in some basic goods, particularly garments, from its neighbours such as Laos, Cambodia and Myanmar, where labour is even cheaper.

To stay ahead of its peers, the country is trying to entice more hi-tech productions by upgrading its transportation infrastructure through Japanese development assistance.

Japanese aid has funded Vietnam’s first metro line, scheduled to open next year in Ho Chi Minh City, and a 210-billion-USD terminal to ease congestion at Hanoi International Airport.

Furthermore, construction started on a 1-billion-USD Samsung screen production factory last year after the Korean-based company launched a 2.5-billion-USD smartphone assembly centre in northern Bac Ninh province. The province is also home to Taiwan’s Foxconn Technology Group facility, a key Apple contractor, to produce cameras, computers and other electronic devices.

Another challenge facing Vietnam is its lack of skilled workers, human resources consulting firm ManpowerGroup said in a report. Only 3 percent of its 90-million-people population are graduates from its 400 colleges and universities, many of which lack lecturers for subjects relevant to working for foreign investors.

Intel has supported the country in a project to improve local university-level engineering programmes. The project is progressing well, even in its early stages, said Boger.-VNA