Global tech investors continue to bet on Vietnam

Apple supplier BOE Technology Group plans to invest US$400 million to build two factories in Vietnam, Reuters reported recently.

It is in talks to lease land in the north to put up factories to add to its relatively small plant in the south that supplies mostly television screens to South Korea’s Samsung and LG Electronics, the report said.

BOE is the latest tech company to eye Vietnam as its next manufacturing hub, where already smartphones, laptops and cameras are made by or for multinationals such as Samsung and Apple.

In the north, where Apple suppliers such as Luxshare and Foxconn already have a presence, BOE will lease 100 hectares to build a $150-million plant for making remote control systems on 20 ha and others for manufacturing displays.

BOE will invest $250 million in a plant on 50 ha while suppliers will use the remaining 30 ha.

Everything will be in place by 2025.

The company plans to make the more sophisticated organic light-emitting diode, or OLED, screens there rather than liquid-crystal displays.

A recent survey by German logistics firm Container xChange found that 67.3% of respondents believe Vietnam and India will rise as container shipping hubs in 2023.

They expect the two countries to change the global shipping industry as companies look to expand their network of manufacturing locations, the survey, which polled 2,600 industry professionals in 20 countries, said.

Their expectations seem to be influenced by the fact that many tech giants established or expanded their presence in Vietnam last year.

In December Apple was reported to soon begin MacBook production in Vietnam for the first time, while Samsung, which has been making half of its smartphones in Vietnam, opened its biggest research and development center in Southeast Asia in Hanoi.

American aviation firm Boeing held its first Aerospace Industry Forum in Vietnam in August, seeking local suppliers for its global supply chain.

U.S. company Synopsys, one of the world’s biggest chip design software makers, is set to invest in and shift its engineer training to Vietnam, while last year South Korea’s Amkor Technology signed a deal to set up a $1.6-billion semiconductor materials manufacturing factory in the northern province of Bac Ninh.

“Vietnamese workers have been improving in their tech manufacturing capability, and foreign companies such as Samsung have been increasingly recruiting locals from the top local universities,” Do Thi Thuy Huong, a member of the Vietnam Electronics Industries Association’s executive board, said.

In the last five years Vietnam has expanded its presence in supply chains and is now capable of making complex products, which is why more foreign firms are choosing it as their next manufacturing hub, she told VnExpress International.

The Politburo, the Communist Party’s highest body, issued a decree in 2019 that sought to improve the quality of foreign projects in the country.

FDI plays a major role in the Vietnamese economy, accounting for a large share of all investment. FDI disbursement last year rose 13.5% to $22.4 billion.

In September last year Prime Minister Pham Minh Chinh told a group foreign business executives that Vietnam would create a safe and transparent investment environment and urged them to keep faith and do long-term business in the country.

The government has always had consistent policies to ensure economic stability, control inflation and maintain reasonable foreign exchange and interest rates, he added.