Factories in Tan Uyen city, the southern province of Binh Duong (Photo: VNA)

According to the Industrial Insider 2024 released by Savills Vietnam in November, the manufacturing sector accounted for 48 per cent of the total newly registered foreign direct investment (FDI) for the first nine months in the northern region, focusing on high-value industries such as vehicles and electronics.

The north attracted seven of the 10 corporations in the semiconductor sector. Bac Ninh province leads with four: Samsung Electronics, Amkor Technology, Hanmi Semiconductor, and Victory Giang.

Big names such as Samsung, Foxconn, and Intel have established Vietnam as a leader in electronics manufacturing. Additionally, prominent Chinese electronics brands, including TCL, Haier, and Midea have expanded operations in the country, specifically in the north, bringing high-quality products to market while stimulating local supply chains.

Thomas Rooney, senior manager of Savills Hanoi’s Industrial Services, said that the southern provinces mainly attracted tenants from processing industries such as rubber, plastics, food and beverage, while the north has become a hub of high value-added industries.

“With the goal of positioning Vietnam as a high-tech manufacturing centre, the north is said to have greater resilience and become an attractive destination for investors. This provides momentum for industrial development,” Rooney said.

Under the incoming US administration, experts believe Vietnam’s strategic position, resilient foreign investment flows, and role in supply chain diversification offer significant opportunities for economic growth.

Koh Eng Meng, deputy director of Investment and Asset Management of KTG Industrial, highlighted Vietnam’s strategic advantage in Southeast Asia, noting that the country has largely avoided the harshest penalties impacting Chinese exports.

“Vietnam’s minor trade deficits with the US and its favourable position in Southeast Asia make it an essential destination for foreign investment, especially northern areas not far from China,” he said.

Such positioning is supported by data from S&P Global Market Intelligence, which identifies Vietnam as a top reshoring destination, even surpassing Mexico. A report released in September highlighted Vietnam’s significant growth in reshoring-related sales, driven by domestic demand and exports. This aligns with the China+1 strategy, as companies diversify production to mitigate geopolitical risks, with Vietnam emerging as a top choice.

Typically industrial property areas in Vietnam are heading the charts in FDI results. Bac Ninh is the leading province with 16.2 per cent of total FDI, equivalent to just over $5 billion, tripling last year’s figure, followed by Quang Ninh with $2.23 billion, Ho Chi Minh City $2.28 billion, Haiphong $2.15 billion, and Hanoi $2.06 billion.

Savills said the northern provinces have advantages in abundant land and reasonable rents. In the first half of 2024, northern economic zones provided almost 13,000 ha of industrial land in 73 industrial parks, up 12 per cent over the previous year thanks to the expansion of parks in Haiphong, Hung Yen, and Hai Duong.

Moreover, the industrial land rental price in the north is 28 per cent lower than in the south. Northern provinces have an average occupancy rate of 78 per cent, with an average land price of $132 per sq.m.