Electronic firms continue to shift investment to Vietnam

In recent years, Vietnam has emerged as a preferred destination for global technology and electronics firms seeking to diversify their production bases. With a favorable business environment, skilled labor force, and strategic location in Southeast Asia, the country has attracted significant investments from industry giants such as Apple, Foxconn, Samsung, and LG. This article delves into the ongoing shift of production hubs to Vietnam and explores the implications for the global electronics and technology sector.

Apple’s strategic move to Vietnam

Apple Inc., one of the world’s leading technology companies, has made significant strides in expanding its production footprint in Vietnam. In 2023, Apple announced plans to move its MacBook production chain to Vietnam, a move that underscores the country’s growing importance in the global supply chain. The tech giant has tasked its largest supplier, Foxconn, with launching a MacBook production line in Vietnam as early as May this year. Moreover, Apple is also planning to produce its high-end Mac Pro in Vietnam, marking a significant shift from its traditional production bases in China.

By 2025, Apple aims to produce approximately 20% of its total iPads and Apple Watches in Vietnam, alongside 5% of its MacBooks and a staggering 65% of its AirPods. These ambitious targets reflect Apple’s commitment to reducing its reliance on China and diversifying its manufacturing operations. Currently, 25 out of Apple’s 190 partners are already operating factories in Vietnam, further solidifying the country’s role in Apple’s global supply chain.

Foxconn and Goertek lead the way

Foxconn, Apple’s largest supplier, has been at the forefront of this shift. After investing a substantial $1.5 billion in Vietnam, Foxconn has announced plans to inject an additional $300 million into its Fukang factory located in the Quang Chau Industrial Park in Bac Giang province. This move is expected to enhance the company’s production capacity and further integrate Vietnam into Apple’s global supply chain.

Similarly, Goertek, another key Apple supplier, has announced a $300 million investment in Bac Giang. This investment will bolster Goertek’s manufacturing capabilities and support Apple’s ambitious production targets in Vietnam. The decision by these major suppliers to expand their operations in Vietnam is a testament to the country’s growing appeal as a manufacturing hub.

Vietnam’s rising electronics industry

The shift of production hubs to Vietnam is not limited to Apple and its suppliers. Other global electronics firms are also making significant investments in the country. Lxshare, which is set to assemble the iPhone 15 Pro Max, currently operates six factories in Vietnam, employing a total of 40,000 laborers. This substantial workforce underscores the scale of Lxshare’s operations and its commitment to Vietnam as a key production base.

Electronics firm Pegatron is another major player expanding its presence in Vietnam. The company is in the process of building a factory worth approximately $481 million in Hai Phong. Additionally, Pegatron has plans to relocate its research and development (R&D) center from China to Vietnam, further enhancing the country’s position as a hub for technological innovation.

Other leading companies, including OPPO, HP, and Brose, are also considering relocating their production plants to Vietnam. These potential moves would further strengthen Vietnam’s electronics industry and position the country as a key player in the global market. Meanwhile, companies like Xiaomi, Bosch, Panasonic, Amkor, Sharp, and Compal are also planning to expand their business operations in Vietnam, highlighting the country’s growing attractiveness as an investment destination.

Korean giants double down on Vietnam

Korean electronics firms have also played a significant role in Vietnam’s rise as a manufacturing powerhouse. Samsung, one of the largest foreign investors in Vietnam, has already poured $18 billion into the country and recently launched Southeast Asia’s largest R&D center in Hanoi. Samsung’s commitment to Vietnam is set to continue, with plans to raise its total investment to $20 billion in the near future. This increased investment will likely lead to the expansion of Samsung’s production facilities and further integration of Vietnam into its global supply chain.

LG, another major Korean electronics company, is also making significant investments in Vietnam. The company has announced plans to inject an additional $4 billion into its operations in the country. This investment will enhance LG’s manufacturing capabilities and support its goal of becoming a leading player in the global electronics market.

Vietnam’s role in the global supply chain

The ongoing shift of production hubs to Vietnam by global technology and electronics firms underscores the country’s growing importance in the global supply chain. With significant investments from industry giants such as Apple, Foxconn, Samsung, and LG, Vietnam is poised to become a major player in the global electronics industry. The country’s favorable business environment, skilled labor force, and strategic location make it an attractive destination for companies seeking to diversify their production bases and reduce their reliance on China.

As more companies continue to invest in Vietnam, the country’s electronics industry is expected to grow rapidly, further solidifying its position as a key hub for global technology and electronics production. Business owners and investors should closely monitor these developments as Vietnam continues to rise as a strategic player in the global market.

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Source: VietnamPlus