The factory is expected to come into operation in the fourth quarter of this year, following an investment of $450 million for the first phase.

Last month, another Chinese firm, Trina Solar Cell Co., Ltd. was awarded an investment registration certificate for a project in the northern province of Thai Nguyen worth $454 million to produce solar modules and batteries. This has raised the total amount invested in Vietnam by Chinese firms to $932 million.

Trina Solar Cell had previously built two projects with a total registered investment capital of $478 million to produce photovoltaic cells for solar batteries, and silicon bars and monocrystalline silicon panels.

According to a report from Vietdata, the solar battery market has a lot of development potential over the next few years.

However, competition in the industry is fierce, with domestic enterprises yet to get involved significantly. Currently, Irek Energy JSC is the only domestic enterprise with a notable market share, the rest of the market is mostly foreign-owned companies, mainly Chinese and American.

Nguyen Mai, chairman of the Vietnam Association of Foreign-Invested Enterprises, said, "China is the world leader in developing solar batteries with many projects in Bac Giang, Thai Nguyen, and Bac Ninh provinces, and we welcome this investment in renewable energy projects."

"Chinese firms are not only spending on solar cells, they are also interested in semiconductors. However, Vietnam will have to become adept at managing these new technologies and transferring technical knowledge from foreign investors," added Mai.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, as of March 20, the total amount of overseas funding in Vietnam reached more than $6.17 billion, an increase of 13.4 per cent on year. China is top of the list of foreign investors for the number of new ventures, accounting for 27.8 per cent.