In 2020, although the world and regional economy are heavily influenced by the supply chain disruptions due to the impact of Covid-19, however, the export of goods still increased. In particular, the proportion of high-tech product export value increased from 22.9% in 2016 to 50% in 2020

Many corporations and technology enterprises are investing in Vietnam.
Photo: T.D

Pick up large capital from technology corporations

According to the Ministry of Industry and Trade, the proportion of exported goods in the total export value has increased from 65% in 2016 to 85% in 2020. The proportion of high-tech export value increased from 22.9% in 2016 to 50% in 2020. Along with the wave of companies, the technology corporations poured capital into Vietnam.

At the beginning of 2021, Vietnam still witnessed new investment commitments as well as supplementing the large capital of technology corporations. Notably, in late January 2021, Intel Corporation (USA) signed a certificate of adjusting additional investment worth US$475 million for the construction production project and modern chip assembly in the High-tech HCMC (SHTP). This investment enhances production of Intel products for devices using new generation mobile network technology (5G), Intel Core processor with Intel Hybrid technology and Intel Core processor 10. Thus, the total investment of the technology corporation from the US in Vietnam has now amounted to over US$1.5 billion, the largest high-tech investment in Vietnam.

Intel Products Vietnam (IPv) is an important part of Intel's production chain worldwide. By the end of 2020, IPV brought more than 2 billion products to customers worldwide. According to Alan Danner, Intel Products Vietnam's Finance Director, as of 2020, the total accumulated exports of Intel factory at SHTP reached over US$50 billion and created nearly 7,000 jobs, including 2,700 Intel staff. With this additional investment of US$475 million, IPV will continue to focus on solving limits in innovating innovation technology and improving the capacity of talented staff.

In Hai Phong, LG Display Vietnam Co., Ltd. recently signed the investment registration certificate with an additional US$750 million, bringing the total investment capital of the investor's project from Korea to US$3.25 billion. LG Display Vietnam specializes in manufacturing TV displays, plastic screens for devices. This additional capital is expected to be implemented in March 2021 and by May will officially put into production. When additional projects are implemented, it will recruit about 5,000 employees, each year will contribute about US$5 million to the state budget (personal income tax). In addition, LG's leadership committed in this quarter could continue to implement a US$1.5 billion project.

Increase export value

Jeff Nessom, Vice President Techtronic Industries Engineering (TTI) said the company has shifted from North America to Asia. Since the end of 2019, the company has spent US$650 million to invest in building a factory, the Center for Research and Development in Ho Chi Minh City High-Tech Park. Currently, the export volume in Vietnam has increased from US$300 million at the end of 2019 to US$1.5 billion at the end of 2020 and is estimated at US$6 billion by 2025. The company also aims to increase the supply of supporting industrial products in Vietnam to 80%.

According to experts, Vietnam's pandemic control is highly appreciated by the international community. Multinational corporations are considering investment transfer and moving production chains to Vietnam. And the increase of investment capital of technology corporations from the first months of 2021 is a demonstration that Vietnam has many opportunities to attract more foreign investment capital and products.

However, to grab the opportunity, enterprises need to focus on two factors that are high quality human resources training and infrastructure. Do Thi Thuy Huong, Member of Vietnam Electronics Enterprise Association (Veia), said that in the past 5 years, the growth rate of the electronics industry ranges from 18-22%/year, which is the industry with a large number of exports, offset the export turnover of the whole country.

Before the wave of supply chain movement, many electronics companies were present in Vietnam. However, this is also a challenge because we do not have core enterprises, supplying terminal accessories for major manufacturers around the world. Moreover, Vietnamese workers only meet cheap labor standards, no engineers create higher value.

In addition, local ministries determine strategic priority, policy frameworks, improve their business investment environment. Import procedures for production technology materials must also be reformed in a simpler and more convenient way for enterprises.

Particularly with domestic enterprises supplying supporting industrial products, it is necessary to actively cooperate with foreign investment enterprises producing terminal products to quickly access funds and at the same time support the production capacity for export and supply high-value products, solving material supply.