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Samsung’s US$1.8 Billion Investment to Boost Vietnam’s OLED Manufacturing Capacity
Fresh investment by Samsung in Vietnam
Samsung Display Co, a subsidiary of South Korean electronics giant Samsung, is set to invest an additional US$1.8 billion in a new OLED manufacturing plant in northern Vietnam, Reuters is reporting. The facility, to be located in Yen Phong industrial park, Bac Ninh province, will focus on producing advanced organic light-emitting diode (OLED) displays for automobiles and technology equipment. This investment will elevate Samsung’s total capital in Bac Ninh to US$8.3 billion, up from the current US$6.5 billion.
The new plant is strategically positioned near Samsung’s existing electronics facility, allowing the company to leverage synergies in logistics and supply chain management. This expansion not only reflects Samsung’s confidence in Vietnam’s manufacturing capabilities but also reaffirms the country’s growing role as a global electronics production hub. Over the past decade, Vietnam has emerged as a preferred destination for major electronics manufacturers due to its competitive labor costs, stable business environment, and advantageous trade agreements.
Strengthening Vietnam’s position in the global supply chain
Vietnam’s ability to attract substantial investments from global leaders like Samsung highlights its competitive edge in the global supply chain. Samsung’s commitment is a testament to the country’s evolving industrial landscape, which has seen significant growth in high-tech manufacturing and electronics production. The Vietnamese government has actively supported this development through favorable policies and investment incentives, making it an attractive destination for companies looking to diversify their manufacturing bases away from traditional hubs like China.
Samsung’s cumulative investment in Vietnam is growing
Samsung’s cumulative investment in Vietnam now totals US$22.4 billion, with six manufacturing plants, one research and development (R&D) center, and a sales entity established across the country. This extensive footprint has positioned Samsung as a crucial player in Vietnam’s economy, contributing significantly to the country’s exports. In 2023, despite global economic challenges and a shrinking mobile phone market, Samsung Vietnam achieved an impressive export turnover of US$55.7 billion.
Advancing R&D and innovation in Vietnam
Beyond manufacturing, Samsung is also deepening its engagement in Vietnam’s R&D ecosystem. The company’s R&D center in Hanoi employs 2,400 engineers, who are instrumental in the development of cutting-edge technologies, including AI features for the new Galaxy S24 series. This center not only showcases Samsung’s commitment to innovation but also highlights the growing technical expertise of Vietnamese engineers. By integrating local talent into its global R&D network, Samsung is helping to elevate Vietnam’s profile as a hub for technological research and development.
Collaboration with the National Innovation Center (NIC)
In addition to its manufacturing and R&D activities, Samsung is collaborating with Vietnam’s National Innovation Center (NIC) to support the country’s ambition of becoming a leader in the semiconductor industry. As part of this collaboration, Samsung has pledged to assist in training 50,000 semiconductor engineers by 2030. This initiative aligns with Vietnam’s broader strategic goal of building a skilled workforce that can support the country’s transition to more sophisticated and higher-value-added industries.
The partnership with the NIC is expected to accelerate the development of Vietnam’s semiconductor sector, a critical area for the future of global technology supply chains. By investing in talent development and fostering innovation, Samsung is playing a pivotal role in enhancing Vietnam’s competitiveness in high-tech industries.
Implications for Vietnam-South Korea relations
Samsung’s ongoing investments are not only significant for Vietnam’s economic development but also for strengthening diplomatic and economic ties between Vietnam and South Korea. The two countries have enjoyed a robust bilateral relationship, characterized by strong trade and investment flows. Samsung’s expansion in Vietnam is likely to further deepen these ties, creating new opportunities for collaboration in technology, innovation, and industrial development.
As Vietnam continues to position itself as a key player in the global electronics supply chain, Samsung’s investments will be crucial in driving the next phase of the country’s industrial growth.
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Dezan Shira & Associates assists foreign investors throughout Asia from offices across the world, including in Hanoi, Ho Chi Minh City, and Da Nang. We also maintain offices or have alliance partners assisting foreign investors in China, Hong Kong SAR, Dubai (UAE), Indonesia, Singapore, Philippines, Malaysia, Thailand, Bangladesh, Italy, Germany, the United States, and Australia.
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