At a conference to announce development planning towards 2030 and investment promotion activities for the northern province of Bac Ninh in 2024 on September 23, Samsung Display Vietnam and Bac Ninh People’s Committee signed an MoU to invest another $1.8 billion. This additional investment is aside from a previous investment of $6.5 billion in Yen Phong Industrial Park.

Big technology names are upping their investment activities in Vietnam, photo Le Toan

Samsung Display Vietnam reported profits of $283.6 million on revenues of $6.8 billion in the first half of this year. Samsung, the biggest foreign investor in Vietnam, has spent $22 billion in the country, half of Bac Ninh’s figure.

At the conference, tech group Amkor Vietnam was also permitted to add nearly $1.1 billion to its semiconductor and material production, assembly, and testing plant in the same province. In addition, Foxconn Singapore received approval to inject more than $383 million into the FCPV Foxconn Bac Ninh electronic factory. The provincial administration on the same day also approved Goertek Technology Vina’s electronics production plant, with pledged capital of $280 million.

The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment revealed last week that over a dozen projects on semiconductors, research and development centres, innovation centres, and training of high-quality human resources totalling tens of billions of US dollars will soon be granted investment certificates, and are being negotiated in various localities.

Le Anh Dung, general director of A+ Industrial Real Estate, said, “The world’s most renowned manufacturers such as Samsung, LG, Panasonic, and Amkor have released their long-term expansion plans in the country; thus I forecast that the trend to relocate the operation of electronics components and spare parts suppliers from China to serve larger groups will continue. Besides that, many companies from all over the world also follow multinational corporations to Vietnam to seek opportunities.”

Large-scale groups are not only simply expanding their operation in Vietnam but also establishing a smart production ecosystem for the electronic components, spare parts, and semiconductors in the country, thus their demand on suppliers is always available, Dung added.

The processing and manufacturing industry led in the portfolio of 18 sectors that foreign investors are pouring capital into Vietnam. Statistics published by the FIA show that in the first three quarters of this year, Vietnam attracted nearly $25 billion of foreign direct investment (FDI), up 11.6 per cent on-year. The processing and manufacturing sector took the lead with an account for more than 70 per cent of the total. Between January and September, a total of over 2,490 new projects were granted investment registration certificates, with registered capital of more than $13.55 billion, up 11.3 per cent on-year in terms of capital.

Many localities consider manufacturing and processing as spearheads to attract FDI, such as Vinh Phuc, Quang Ninh, and Haiphong.

Vu Kim Thanh, deputy director of Vinh Phuc Industrial Zones Management Authority, told VIR, “Vinh Phuc targets to become one of the country’s largest industrial hubs in terms of high-tech, electronics, spare parts, and automobiles.”

Statistics from industrial authorities of Vinh Phuc, Quang Ninh, Haiphong, Hung Yen, and others show that the manufacturing and processing sector accounts for between 70-90 per cent of the amount of FDI influx in these localities.

Foreign investors are still covering the market share to become vendors of multinational groups, especially in the high-tech, sophisticated, and complex supporting industry products, such as electronic components, and spare parts, said Dao The Anh, chairman of RSL Group, a promotion and consulting service provider.

“Meanwhile, supporting industry products in Vietnam are mainly in a few sectors, such as textiles, footwear, wood processing, and mechanical engineering. According to our observation, when semiconductor manufacturers ramp up their investment in Vietnam, foreign vendors will still retain the domination position,” Anh said.

Suppliers are accelerating the construction of facilities to join the global supply chain as soon as possible, and almost all these investors come from mainland China, Hong Kong, and Taiwan, Anh added.

“Several of our customers select ready-to-built factory models so that they can optimise their investment opportunities. We see that they are eager to implement the investment plan to join in the supply chain for large groups soon,” Anh said.