Vietnam sits at the intersection of probably the greatest manufacturing relocation move in the world. It is the lucky beneficiary of geopolitical tensions, trade wars, disruption in global supply chain and rising costs. Perhaps a lucky conjunction of stars has converged to propel this once upon a time, a colony of both China and France, to rise up to be the fastest developing country in the world.
Thanks to the implementation of Doi Moi in 1986 which saw reforms that encouraged privately owned enterprises; improvements in infrastructure and lots of incentives to attract foreign investment, Vietnam is a bright spot in Southeast Asia, attracting most of the foreign direct investments (FDI’s). Foreign companies looking to diversify supply chains away from China see Vietnam as the best option for a low-cost manufacturing base.
At the moment, many big name brands have set up or will be setting up factories in Vietnam – Apple, Intel, Samsung, Canon, Panasonic, Nike, Adidas, Nintendo, Foxconn and Lego, to name a few.
Most recently in December 2022, South Korean electronics giant Samsung has opened a research and development centre in Hanoi, which is Southeast Asia’s largest. Half of all Samsung smartphones are already being manufactured in Vietnam, and the company is poised to raise its investment there from US$18 billion to US$20 billion.
This could very well signify the turning point for Vietnam – from cheap manufacturing base to R&D centre and higher end manufacturing for top electronics MNC’s.