Vietnam is emerging as a global phone manufacturing hub

Tram Ho

With solid fundamentals and its position as one of the most attractive investment destinations for international investors, Vietnam has been “chosen by leading smartphone companies to send gold” with a series of projects. large FDI projects.

Vietnam, a rising “star” in the global supply chain

In a recently published article, the British investment magazine Moneyweek said that “Made in Vietnam” products are asserting their position in the world market. According to Moneyweek, many multinational corporations, especially in the field of electronics, generally consider that products are made in Vietnam as a guarantee of quality.

According to the Ministry of Industry and Trade, in 2021, Vietnam’s electronics industry will account for 17.8% of the entire industry, mainly producing electronic products, computers and components…

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Workers at Samsung factory in Bac Ninh province (Photo: THANH LINH)

According to the report of the Ministry of Industry and Trade, for the whole year of 2021, Vietnam produced 233.7 million mobile phones, up 7.6% and the production value of phone components reached 580,800 billion VND, up 29.5 % compared to 2020. Along with that, the export turnover of phones and components of the whole country reached 57.5 billion USD, up 12.4% compared to 2020 and accounting for over 17.1% of the total export turnover of goods. in the year 2021.

Also in 2021, Vietnam’s FDI attraction achieved many positive signals. Foreign investment capital into Vietnam reached 31.15 billion USD, up 9.2% over the same period in 2020. This shows that foreign investors have placed great confidence in Vietnam’s investment environment.

Data on attracting FDI capital from the Ministry of Planning and Investment in the first five months of 2022 also shows that foreign investors continue to consider Vietnam an attractive destination when pouring about 7.71 billion USD into Vietnam, up from 7.71 billion USD. 7.8% over the same period last year.

Considered as a rising “star” in the global supply chain, Vietnam has the appearance of most of the world’s leading names in electronics and technology such as: Samsung, Intel, LG, Foxconn , Canon, Panasonic, Electronics, Nokia, Meiko, Apple, Microsoft, Qualcomm… Among these, especially Samsung of South Korea, by the end of 2021, the amount of capital that this group has invested in Vietnam will reach nearly 18 billion USD.

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By the end of 2021, the amount of capital that Samsung Group invested in Vietnam reached nearly 18 billion USD (Photo: Tomoya Onishi)

Samsung Vietnam currently operates 6 factories in Bac Ninh, Thai Nguyen and Ho Chi Minh City, one R&D center in Hanoi and one sales entity. Currently, more than 50% of global Samsung phone production is produced in Vietnam and exported to 128 countries. In the development plan of the global Samsung Group, Vietnam is surpassing its role as a key global production base and will become a strategic center for R&D.

Besides Samsung, although it has not yet produced iPhones in Vietnam, right from the beginning of 2021, Foxconn Technology Group – Apple’s main manufacturing partner has invested in building a factory in Bac Giang with a total registered investment capital of 270 million dollars. This project specializes in the production of tablets and laptops with a capacity of about 8 million products per year.

Previously, all iPad products were assembled in China, but now they have expanded to Vietnam at Apple’s request. Important Apple products such as iPad, AirPods, MacBook, AirPods and AirPods Pro are now manufactured in Vietnam and exported around the world.

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The production line of Xiaomi’s mobile phones and devices in Vietnam (Photo: TU)

Most recently, Xiaomi, a Chinese technology company – which is the world’s manufacturing center, also expanded production to Vietnam. DBG Technology Vietnam, a partner of Xiaomi, has built a phone assembly plant in Thai Nguyen, worth $80 million and put into operation from June 2021. This factory is expected to produce 20 million products per year not only phones but also computers, home electronics, electronic components.

A promising market

According to experts, the reason why Vietnam is a place where many “big guys” in the technology village “choose to send gold” is because the Vietnamese market is considered to have a lot of potential.

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Vietnam is a place where many “big men” in the technology village “choose to send gold” (Photo: Nguyen Huy Kham / REUTERS)

Vietnam is geographically located in an area with a fast-growing and dynamic industry. In addition, there is a domestic market of nearly 100 million people and direct access to the ASEAN market of 600 million people, a large international export market thanks to participation in free trade agreements (FTAs). .

Besides, Vietnam is also a country with abundant labor resources, young age and especially low cost compared to the whole labor market in the world. The stability also makes Vietnam an attractive option.

Research and development (R&D) projects are receiving special incentives and have great potential for development when Vietnam is capable of providing high-quality human resources for this field. The success of Samsung Vietnam’s R&D Center is an example of this statement.

Notably, especially for the smartphone product group, Vietnam also has a high rate of people using it in the world, with an average of 1 smartphone per person. This is also an important factor for Xiaomi to build a production plant because Vietnam is Xiaomi’s big market, second only to China.

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Vietnamese people tend to choose to buy modern technology equipment, with the average spending on electronics among the top countries in the region.

GfK’s 2021 statistics show that, despite the impact of the epidemic, the number of smartphones sold in Vietnam market grew well from 15.7 million units in 2020 to 16.8 million units.

The proportion of smartphones with basic phones is also growing year by year. In 2020, the corresponding figure is 71% and 29%, by 2021 it is 80% and 20%. The amount of money spent buying a smartphone has also increased significantly, from about 257 USD (5.8 million VND) in 2017 to 292 USD (6.6 million VND).

Vietnamese people prefer to upgrade smartphones with higher configurations that support new technologies such as 5G and large memory, although the average retail price of smartphones tends to increase in 2021 ,” a GfK representative said.

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Source : Genk