Foreign producers expanding their presence in Vietnam, writes online Japanese newspaper.
There are more investors expanding their business in Vietnam to utilize support policies from the government and the country’s large, low cost workforce, according to the Nikkei Asian Review, an online Japanese newspaper.
It noted that Microsoft has moved its manufacturing lines from two factories it closed down in China to its factory in the north of Vietnam.
Samsung, meanwhile, will invest about $4 billion in enhancing the manufacturing capacity at its two factories in northern Bac Ninh and Thai Nguyen provinces. After enhancing capacity at its Thai Nguyen province the total exports by the two Samsung factories are expected to reach $32 billion in 2015. The investment will expand production of its Galaxy product line.
In March LG opened a new factory costing $1.5 billion in northern Hai Phong city, which has begun producing smartphones and accessories. Thirty per cent of the company’s products are now manufactured in Vietnam.
In the first half of the year, 107.3 million smartphone and mobile phones were manufactured in Vietnam, a 68.8 per cent increase compared to last year. This was the first time production exceeded 100 million units and expected annual capacity is more than 200 million units. Samsung, Microsoft and LG now account for 99 per cent of exported smartphones and mobile phones in Vietnam.
Labor costs in Vietnam are half of those in Shanghai and Guang Zhou province in China, and Nikkei believes the support policies from the Vietnamese Government are attractive to smartphone investors, especially preferential corporate income tax rates.