Vietnam, new investment destination of electronics industry

A chain to test electronic boards at a RoK-invested business in Yen Phong industrial park (Photo: VNA)

Hanoi (VNA) - The article, published on March 4, spoke highly of Vietnam’s economic growth, which is thanks to being regarded as an investment destination of “big names’’ in electronic manufacturing.

According to the article, while light manufacturing has dominated Vietnam’s economic growth since the Doi Moi economic reforms implemented in the 1980s, over the last decade the country has been repositioning itself to become a dominant player in the global microelectronics industry.

''In 2019, Vietnam ranked as the fourth largest exporter of electrical goods and components to the US. With exports doubling over the last four years and now exceeding 19 billion USD, surpassing Taiwan, Japan, and the Republic of Korea (based on goods exported under chapter 85 of the Harmonized Tariff Schedule). Vietnam’s global electronics industry now accounts for about 40 percent of its exports, and the country seems to be just getting started.''

It also affirmed that Vietnam owes its growing success in attracting foreign direct investment (FDI) in the semiconductor and microelectronics industries to diversify business investment, thus putting Vietnam on the global stage.

The article wrote: “Of the early players, no other firm comes close to having the impact that Samsung has. It’s initial 670 million USD mobile phone manufacturing plant in the northern province of Bac Ninh in 2008 grew to a country-wide investment of 17.3 billion USD within a decade. Samsung is now Vietnam’s largest FDI contributor and accounts for more than 25 percent of its exports. Because of Samsung, Vietnam has become the second largest exporter of smartphones in the world.

“Around the same time, Intel opened its 1 billion USD semiconductor assembly and testing facility in Ho Chi Minh City, putting Vietnam firmly on the global technology map. More investors, like LG, Panasonic and Foxconn soon followed.

“Within Vietnam, microelectronic facilities have concentrated in a few geographic hubs. In the south, the Saigon High Tech Park in Ho Chi Minh City attracted early entrants Intel and Samsung, with firms like Nidec and Jabil soon following. The largest investment capital, however, developed in the northern provinces that ring Hanoi. Bac Ninh, an hour’s drive from Hanoi, was the site of Samsung’s first investment and has since attracted Foxconn and Canon. More recently, firms have been drawn to the port city of Hai Phong, the country’s third largest city, which is already home to Samsung and LG. The city’s close proximity to other manufacturing clusters, its new deep-water port, and its expressway that provides a 12-hour trucking route to China’s electronics epicenter in Shenzhen are helping make the city Vietnam’s new high-tech production center.

“Though the Covid-19 pandemic has dampened the pace of new investments in Vietnam’s microelectronics industry, it has also amplified the country’s attractiveness to investors. Vietnam was successful in containing the outbreak through aggressive quarantine and contact tracing measures, and as a result its economy has the brightest outlook in the region. The ADB forecasts the country will be one of the fastest-growing economies in SEA in 2021, with GDP estimated at 6.8 percent. The Ministry of Industry and Trade is also reporting that several of the world’s largest technology corporations plan to shift their production chains to Vietnam post-Covid-19, an indication that technology firms will accelerate relocation plans in 2021.

“Vietnam’s successful response to the pandemic, combined with its strategic location, low wage rates and foreign trade agreements, will ensure that the region continues to benefit from the shift in supply chains in Asia, making it the new destination for electronics manufacturing,” the article concluded./.