Tech companies increasing investment in Vietnam

| 14/11/2014 |

Samsung Electronics are in advanced talks to invest $3bn in a new smartphone production facility in Thai Nguyen province which, if it proceeds, would be the latest in a series of investments by foreign companies in a burgeoning tech industry in Vietnam. Due to the comparatively low cost of labor and an active government policy of enticing foreign companies with tax incentives and other benefits, Vietnam is surpassing China as a prime destination for technological manufacturing. Other tech companies to have recently expanded operations in Vietnam include Intel, LG, Panasonic and Microsoft. Figures released by the General Statistics Office have shown an 8% year-on-year increase in the value of Vietnamese mobile telephone and parts exports, which stood at $19.2bn for the first ten months of 2014. The industry as a whole now represents 16% of the country’s total exports, ahead of the garments industry and behind only agricultural products. With total investments in Vietnam approaching $11bn, Samsung is the leading tech investor in Vietnam. The proposed $3bn facility would enhance production capacity in Thai Nguyen province, which is already home to a $2bn facility opened in March 2014. Samsung also operate a $2.5bn factory and are considering further expansion within Bac Ninh province, as well as planned investments in the tech-focused Saigon Hi-Tech Park. Increasing its operations in Vietnam is an important part of Samsung’s strategy to reduce production costs and increase profit margins whilst attempting to recapture market share in the smartphone and tablets market.

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