Turning Vietnam into its global production base, how did Samsung spend nearly $ 20 billion to establish a “massive” ecosystem?

On the morning of December 23, 2022, the inauguration ceremony of Samsung’s Research and Development Center (R&D) took place in Hanoi. With a total area of ​​79,522 m2, total investment capital of 220 million USD, this is the largest R&D center in Southeast Asia and one of 18 Samsung R&D centers around the world.

Mr. Lee Jae-yong – Chairman of Samsung personally came to Hanoi to attend the inauguration of this new R&D center.

Samsung up to this point has always been the largest foreign investor in Vietnam. Continuously increasing investment in Vietnam, after 14 years, Samsung’s total investment capital in Vietnam increased by 29 times (from 670 million USD in 2008 to 19 billion USD in 2021). This figure is expected to exceed $20 billion by 2022.

In 2021, Samsung Vietnam’s revenue reached 74.2 billion USD, up 14% compared to 2020, export turnover reached 65.5 billion USD, up 16% compared to 2020.

This revenue figure not only comes from the Phones & Electronic Components segment – the key factor, but also from the ecosystem of “massive” companies operating in a variety of other fields. Korea’s leading Chaebol is also actively “forging ahead” in the manufacturing of auto parts, chemicals, consumer goods to construction, tourism – hotel, IT, insurance, etc.

Samsung Electronics and Consumer Electronics & Phones factories in recent years have made great contributions to Vietnam’s socio-economic development, especially in promoting exports.

In the first 9 months of the year, 4 factories of Samsung Electronics in Vietnam, namely Samsung Thai Nguyen (SEVT), Samsung Bac Ninh (SEV), Samsung Display Vietnam (SDV) and Samsung Electronics HCMC CE Complex (SEHC) recorded revenue reaching $56.5 billion, up 30.9% over the same period. In which, the main source of revenue still comes from Samsung Thai Nguyen with 23.2 billion USD.

Up to now, 50% of Samsung’s total worldwide supply of mobile phones is being produced in Vietnam.

In the field of construction , Samsung Engineering is the name with the most impressions in the Vietnamese market. This company has just joined hands with AMECC to do the Global Module Center Project at the end of November 2022, successfully installed a giant polypropylene unit module for the Long Son petrochemical project and is also a major shareholder of DNP Water (holding 24% of the capital).

In the plastic/chemical industry, Samsung participates in the Vietnamese market with two representatives, Samsung Polymer Vietnam and Samsung Chemtech Vina.

Samsung SDS – a factor in Samsung’s IT segment also chose Vietnam as a destination in the network of 40 countries covered.

With a large workforce, Samsung itself also established a company in charge of providing meals for workers, Samsung Welstory.

Samsung’s ambition to expand its “centipede” in Vietnam is also seen in the insurance industry with Samsung Vina Insurance; or tourism – with one of the outstanding projects being the Shilla Monogram Quangnam Danang Resort, operated by The Shilla – a subsidiary of Samsung.

Overall, Samsung has really turned Vietnam into its global production base. And Samsung’s strategic investment picture has become more complete by the end of 2022 when the important R&D “piece” is completed. Samsung is also conducting software development and testing (S/W) of mobile devices and networks in Vietnam.