Foreign direct investment has been the catalyst for economic growth inVietnam over recent years, and capital investment by foreign enterprisescontinues to set the pace for development of the nation’s supportindustries, reported The Voice of Vietnam (VOV).
Intel isbelieved to have started the second wave of foreign investment inVietnam when it built a 1 billion USD chip manufacturing facility in HoChi Minh City back in 2010 but it was Samsung who sealed the deal.
TheRepublic of Korean technology giant has methodically moved itsmanufacturing base to Vietnam away from China and currently contributesup to nearly 20 percent of the total export turnover of Vietnam.
Inrecent years, international giants such as Intel, Canon, Panasonic,Fujitsu, LG, Bosch and Nokia have followed suit pumping billions of USdollars into the Vietnamese electronics industry.
Samsung hasinjected billions of US dollars into smartphone production plants in thecountry, principally in the Hanoi metropolitan and surrounding areaspaving the way for Vietnam to become a leading production base for theindustry.
As many as 120 out of 400 million Samsung mobile phoneitems have been produced in the northern province of Bac Ninh alone.More recently, Samsung constructed another factory in the northernprovince of Thai Nguyen.
Foreign investors consider thedevelopment of the support industry as a vitally important factor in thesustainability of the electronic industry by sharpening thecompetitiveness of the sector.
However, recently a few leadingeconomists have raised concern that somehow the lack of raw materialsand component parts currently available in country, may lead to anoverreliance on imports for these items and impede national economicgrowth.
Canon Vietnam Director General Katsuyoshi Soma said hedoesn’t see that there is a problem however. He added his companycurrently operates three factories in Vietnam and at present utilisesroughly 65 percent domestically-produced raw materials.
Thecompany has been forced to import almost all electronic components, suchas semi-conductors, molds and precision mechanical components becausethey are currently unavailable in country, but is confident the supportindustries will develop with time.
A representative fromPanasonic Vietnam Co. Ltd in turn shared the same views as Soma sayingthe country’s support industry is still in its infancy but offerstremendous opportunity for future growth.
The government hasalso taken the vanguard and has created a business climate conducive toour needs with many attractive investment incentives, the representativeadded.
Vo Tri Thanh, Vice Director of the Central Institute forEconomic Management (CIEM), also said he does not think development ofthe support industry poses a monumental challenge either.
Thanhcites the case of the motorbike support industry as a case on point. Inthe early 2000s, the industry gained significant success in providingspare parts for motorbike assembling despite fierce competition causedby imported products from China.
However, at present, more than90 percent of input materials for Honda Vietnam – one of the biggestmotorbike producers – are being produced in the domestic market.
Inhis view, it is both in the interest of the foreign investors and thecountry to develop an in country support industry for the electronicsindustry. For its part the government is on the right track providingmore incentives for investment.
Particularly, thegovernment should give priority for multinational groups who commit tonurturing technology transfer to help Vietnamese small-and-medium-sizedenterprises (SMEs).
Furthermore, Thanh said following the lead ofthe international giants and the government, the electronics sectorprovides many excellent opportunities for those pioneering VietnameseSMEs to get into the industry and to achieve success.-VNA
Intel isbelieved to have started the second wave of foreign investment inVietnam when it built a 1 billion USD chip manufacturing facility in HoChi Minh City back in 2010 but it was Samsung who sealed the deal.
TheRepublic of Korean technology giant has methodically moved itsmanufacturing base to Vietnam away from China and currently contributesup to nearly 20 percent of the total export turnover of Vietnam.
Inrecent years, international giants such as Intel, Canon, Panasonic,Fujitsu, LG, Bosch and Nokia have followed suit pumping billions of USdollars into the Vietnamese electronics industry.
Samsung hasinjected billions of US dollars into smartphone production plants in thecountry, principally in the Hanoi metropolitan and surrounding areaspaving the way for Vietnam to become a leading production base for theindustry.
As many as 120 out of 400 million Samsung mobile phoneitems have been produced in the northern province of Bac Ninh alone.More recently, Samsung constructed another factory in the northernprovince of Thai Nguyen.
Foreign investors consider thedevelopment of the support industry as a vitally important factor in thesustainability of the electronic industry by sharpening thecompetitiveness of the sector.
However, recently a few leadingeconomists have raised concern that somehow the lack of raw materialsand component parts currently available in country, may lead to anoverreliance on imports for these items and impede national economicgrowth.
Canon Vietnam Director General Katsuyoshi Soma said hedoesn’t see that there is a problem however. He added his companycurrently operates three factories in Vietnam and at present utilisesroughly 65 percent domestically-produced raw materials.
Thecompany has been forced to import almost all electronic components, suchas semi-conductors, molds and precision mechanical components becausethey are currently unavailable in country, but is confident the supportindustries will develop with time.
A representative fromPanasonic Vietnam Co. Ltd in turn shared the same views as Soma sayingthe country’s support industry is still in its infancy but offerstremendous opportunity for future growth.
The government hasalso taken the vanguard and has created a business climate conducive toour needs with many attractive investment incentives, the representativeadded.
Vo Tri Thanh, Vice Director of the Central Institute forEconomic Management (CIEM), also said he does not think development ofthe support industry poses a monumental challenge either.
Thanhcites the case of the motorbike support industry as a case on point. Inthe early 2000s, the industry gained significant success in providingspare parts for motorbike assembling despite fierce competition causedby imported products from China.
However, at present, more than90 percent of input materials for Honda Vietnam – one of the biggestmotorbike producers – are being produced in the domestic market.
Inhis view, it is both in the interest of the foreign investors and thecountry to develop an in country support industry for the electronicsindustry. For its part the government is on the right track providingmore incentives for investment.
Particularly, thegovernment should give priority for multinational groups who commit tonurturing technology transfer to help Vietnamese small-and-medium-sizedenterprises (SMEs).
Furthermore, Thanh said following the lead ofthe international giants and the government, the electronics sectorprovides many excellent opportunities for those pioneering VietnameseSMEs to get into the industry and to achieve success.-VNA
