Vietnam’s electronics sector takes off

Samsung HCM

Samsung factory in Ho Chi Minh City

Low wages and favourable investment incentives have made Vietnam’s electronics manufacturing sector a highly attractive target for multinational corporations to set up or expand factories.

With Singapore and  its formerly strong electronics industry at the brink of recession and Thailand’s minimum wage policy deterring investors, Vietnam has become a solid alternative for global electronics goods makers who are increasingly relocating manufacturing outlets to Vietnam, such as Intel, Samsung and Jabil Circuits.

Vietnam’s mobile phone and household electronics exports have increased by 91 per cent over the last 10 months to $16 billion, he trade ministry reported.

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

Jabil Circuit, an  electronic parts manufacturer headquartered in Florida, has said it plans to double the investment for its card payment machine and network router factory in Ho Chi Minh City to $100 million in the next three years. Samsung reportedly is considering pouring $700 million into a new mobile phone factory in the north of Vietnam. Japanese Nidec Corp, the world’s biggest manufacturer of motors for hard disk drives, and has revealed that it would set up the seventh factory in Ho Chi Minh City in late 2012, VietnamNet reported.

Semiconductor giant Intel, who opened an assembly and testing plant in Ho Chi Minh City in 2010 that is the largest such facility for the company worldwide, said it is looking to increase the complexity of work that is being done in Vietnam and invest into more high-tech facilities.

In fact, Vietnam’s electronics export have this year overtaken garments exports and provided a bright spot for a government struggling to revive economic growth. Experts say that the rapid growth in electronics manufacturing due to the country’s cost advantage has helped to diversify Vietnam’s trade profile and improve the structure of its vulnerable trade balance.

Vietnam’s average minimum wage is one of the lowest in Southeast Asia, see our story.

  

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Arno Maierbrugger

Business journalist

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