South Korea’s Samsung Electronics will invest $920 million in a production plant in northern Vietnam, a South Korean government official said on February 16.
The investment will be made through Samsung Electro-Mechanics Vietnam, Samsung’s component manufacturing arm, and will increase the company’s total investment in Vietnam to $2.27 billion.
Samsung plans to expand production of printed circuit boards and other mobile phone components, such as touch sensors, camera modules, linear motors and lenses, in Tai Nguyen province, north of Hanoi.
Samsung has grown to become Vietnam’s largest foreign investor and exporter, with two smartphone factories and a total of 6,600 employees — in addition to another factory in Thai Nguyen, in Bac Ninh province northeast of Hanoi, which also makes for Apple parts. Samsung also operates an electronics factory in the Saigon Hi-Tech Park in the south of the country, where about 7,000 workers make TVs and household appliances such as refrigerators and washing machines.
Vietnam accounts for 60% of Samsung’s total smartphone production
As of last year, the smartphone factory had an annual production capacity of about 180 million units, accounting for 60 percent of Samsung’s total smartphone output.
As a manufacturing powerhouse, Vietnam has become an increasingly important part of the global technology supply chain. It has attracted interest and investment from the likes of Intel, Foxconn and LG, which seek to diversify production and reduce exposure to China, and because of its relative success in containing the spread of the Covid-19 pandemic.
However, the pandemic has also shown that Samsung is too reliant on a single source country and is vulnerable to supply chain disruptions. The company faced unprecedented supply chain disruptions from May 2021, when Vietnam’s deadliest wave of Covid-19 hit, reducing capacity by as much as 40%.
Production moved to Korea, India and Indonesia
Although production has stabilized and most workers in Vietnam have been vaccinated, Samsung is not expected to expand further in Vietnam for the time being. It even recently moved some of its Galaxy smartphone production back to South Korea.
Overall, Samsung plans to spend $140 million on a production diversification plan for its smartphone business, $90 million in India and $50 million in Indonesia. After the restructuring is complete, Vietnam will account for 50% of Samsung’s smartphone production, while India will account for 29% (up from 20%) and Indonesia will account for 6% compared to 4% previously.
Samsung’s smartphone factory in northern Vietnam’s Tai Nguyen province South Korea’s Samsung Electronics will invest $920 million in a production plant in northern Vietnam, a South Korean government official said on February 16. The investment will be made through Samsung Electro-Mechanics Vietnam, Samsung’s component manufacturing arm, and will increase the company’s total investment in Vietnam. to $2.27 billion. Samsung plans to expand production of printed circuit boards and other mobile phone components, such as touch sensors, camera modules, linear motors and lenses, in Tai Nguyen province, north of Hanoi. Samsung has grown into Vietnam’s largest foreign…
South Korea’s Samsung Electronics will invest $920 million in a production plant in northern Vietnam, a South Korean government official said on February 16.
The investment will be made through Samsung Electro-Mechanics Vietnam, Samsung’s component manufacturing arm, and will increase the company’s total investment in Vietnam to $2.27 billion.
Samsung plans to expand production of printed circuit boards and other mobile phone components, such as touch sensors, camera modules, linear motors and lenses, in Tai Nguyen province, north of Hanoi.
Samsung has grown to become Vietnam’s largest foreign investor and exporter, with two smartphone factories and a total of 6,600 employees — in addition to another factory in Thai Nguyen, in Bac Ninh province northeast of Hanoi, which also makes for Apple parts. Samsung also operates an electronics factory in the Saigon Hi-Tech Park in the south of the country, where about 7,000 workers make TVs and household appliances such as refrigerators and washing machines.
Vietnam accounts for 60% of Samsung’s total smartphone production
As of last year, the smartphone factory had an annual production capacity of about 180 million units, accounting for 60 percent of Samsung’s total smartphone output.
As a manufacturing powerhouse, Vietnam has become an increasingly important part of the global technology supply chain. It has attracted interest and investment from the likes of Intel, Foxconn and LG, which seek to diversify production and reduce exposure to China, and because of its relative success in containing the spread of the Covid-19 pandemic.
However, the pandemic has also shown that Samsung is too dependent on a single source country and is vulnerable to supply chain disruptions. The company faced unprecedented supply chain disruptions from May 2021, when Vietnam’s deadliest wave of Covid-19 hit, reducing capacity by as much as 40%.
Production moved to Korea, India and Indonesia
Although production has stabilized and most workers in Vietnam have been vaccinated, Samsung is not expected to expand further in Vietnam for the time being. It even recently moved some of its Galaxy smartphone production back to South Korea.
Overall, Samsung plans to spend $140 million on a production diversification plan for its smartphone business, $90 million in India and $50 million in Indonesia. After the restructuring is complete, Vietnam will account for 50% of Samsung’s smartphone production, while India will account for 29% (up from 20%) and Indonesia will account for 6% compared to 4% previously.
