Vietnamese technology market attracts foreign investment

VietNamNet Bridge – The low investment rate and cheap labor force have been cited the greatest advantages that help Vietnam attract big technology firms from the US and South Korea.

Intel, Samsung Electronics and Jabil Circuit (JBL) are the three big names among the enterprises which have been and considering expanding their business in Vietnam.

Vietnam’s mobile phone and household electronics have increased by 91 percent over the last 10 months to 16 billion dollars, making Vietnam the country with the highest export turnover at that time.

The high growth enjoyed by technology groups has helped ease the investors’ worry about the Vietnam’s economy which has been experiencing the toughest period since 1999.

With the investment rates increasing rapidly in Singapore and Thailand, the escalating political tense between Japan and China, experts have every reason to predict about a new wave of relocating production lines to Vietnam.

According to the US Trade Commission, electronics exports, including computer modems, fixed line telephone sets and mobile phone sets to the US market increased by 58 percent in the first eight months of the year.

This is really an encouraging result, if noting that during the same time, Chinese exports to the US increased by 11 percent, Malaysian four percent, Thai five percent and Indonesian decreased by 16 percent.

Jabil Circuit, the electronic part manufacturer headquartered in Florida, plans to double the investment capital of its card payment machine and network router factory in HCM City to 100 million dollars in the next three years.

According to Mike Matthes, a senior executive of Jabil Circuit, the company in Vietnam would employ some 5000 workers in the next five years. The current number is 1400.

Apple, Cisco and Research and Motion (RIM) have been the biggest clients of Jabil Circuit.

As for Samsung, the South Korean electronics manufacturer is considering pouring 700 million dollars into a new mobile phone factory in the north of Vietnam.

Yonhap News has reported that the plan would open the second investment stage of the giant in Vietnam. The first factory, also located in the north of Vietnam, has become operational with the capacity of 150 million in equipment a year.

Japanese Nidec Corp is now the world’s biggest manufacturer of motors for hard disk drives, and has revealed that it would set up the seventh factory in HCM City in late 2012. Once the factory is put into operation, the number of workers to be employed by Nidec Corp in the city would be 25,000.

Thoi bao Kinh te Saigon in late October reported that Nidec started the construction of a new factory in the Giao Long Industrial Zone in Chau Thanh district of the southern province of Ben Tre, after developing a series of projects in HCM City.

Nidec Tosok Precision Vietnam, a subsidiary of Nidec group would set up a factory on an area of four hectares with the total investment capital of 39.6 million dollars. It would specialize in making parts and accessories for car gearbox.

The factory has been scheduled to become operational in September 2013, while all of its products would be exported.

Than Trong Phuc, Managing Director of DFJ Vina Capital in HCM City, when answering the interview to Bloomberg, said that Vietnam has acquired the technology product market shares from other Asian countries. Vietnam has some advantages to do that, but its biggest advantage lies in the reasonable labor cost.

Vietnam; technology firms; Samsung; investment