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Samsung receives go-ahead for Bac Ninh expansion

Released at: 18:57, 25/02/2017

Samsung receives go-ahead for Bac Ninh expansion

Photo: Viet Tuan

$2.5 billion expansion at Samsung Display given in principle approval from government.

by Duy Anh

Samsung Display officially received an investment license on February 24 for its $2.5 billion expansion project in Bac Ninh province’s Yen Phong Industrial Park.

The government announced in principle approval for the expansion, giving it the preferential treatment available to a large-scale project.

Through the expansion, Samsung Display will officially increase its investment in Vietnam to $6.5 billion. This is also the first billion-dollar project in the country this year. The South Korean technology giant has now invested a total of $17.363 billion in Vietnam.

Samsung subsidiaries

Source: Samsung Vietnam

Industry insiders said the move is in response to growing demand for smartphone display panels, the largest growth segment in the display business, especially the smartphone segment. They believe the expansion is related to Apple’s plan to shift into active matrix OLED (AMOLED) displays.

Samsung is the only group in the world with the exclusive technologies and adequate capacity for AMOLED production. It holds up to 95 per cent of the global AMOLED display market share, with an average capacity of around 200 million products a year.

With the new investment, Samsung continues its role as the largest foreign investor in Vietnam. The expansion also dispels concerns that it would halt investment plans in Vietnam after recent incidents.

Last year, the fallout from Samsung’s dramatic move to end production of its Galaxy Note 7 smartphone hurt an economy already hit by drought and lower oil prices. The recall of 2.5 million smartphones after complaints of exploding batteries contributed to a $1.1 billion decline in exports in September, according to the General Statistics Office (GSO).

From just an ordinary TV manufacturing factory, Samsung’s plants moved into the northern provinces of Bac Ninh and Thai Nguyen and Ho Chi Minh City, manufacturing mobile phones, displays, battery and household electronic products. It is now Vietnam’s biggest exporter, shipping about $39.9 billion of electronics in 2016 and accounting for about 22.7 per cent of the country’s total shipments.

Exports & employees

Source: Samsung Vietnam

Samsung achieved better progress in increasing the localization rate of its products to 45 per cent in 2016 against 35 per cent in 2014. Twenty Vietnamese enterprises became Samsung Tier-1 vendors in 2016, an increase of 16 compared to 2015, and 178 Vietnamese enterprises became Tier-2 vendors, an increase of 41.

On February 12, Prime Minister Nguyen Xuan Phuc paid a visit to the Samsung complex in Bac Ninh, where he expressed a desire for Samsung to allow more domestic companies to join its production chain. “Vietnam in general and Bac Ninh province in particular will create a favorable environment for Samsung to expand its business in the country, including ensuring political stability and sufficient labor resources,” he said.

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