South Korean tech firms are rushing to expand their investment in
Vietnam in line with their effort to build a new production base in the
Southeast Asian country.
South Korea's Seoul Semiconductor Co.
has won a license to invest $300 million to build a semiconductor
production factory in northern Vietnam, industry sources said Tuesday.
Last
week, the provincial government of Ha Nam gave the green light to Seoul
Semiconductor to build the 750,000-square-meter production site that
will house a semiconductor factory and a light-emitting diode assembly
line, they said.
Under an investment plan released by the
Seoul-based firm, a total of $300 million will be injected into building
the site by 2019 to conduct research and produce semiconductors, the
sources said.
"Vietnam was chosen because it will help us meet
the global demand for LEDs and secure a competitiveness in production
costs," a Seoul Semiconductor official said.
Industry sources
forecast that the firm's move is to provide components to other South
Korean tech firms, which already have made inroads into the Southeast
Asian country.
According to the sources, South Korean tech giant
Samsung Electronics Co. produces between 40 and 50 percent of its
smartphones at its two factories located in Bac Ninh province, northern
Vietnam, and Thai Nguyen.
In early 2015, Samsung Electronics began building a consumer electronics production complex in the southern city of Ho Chi Mihn.
The
complex covers the production of TVs, air conditioners, washing
machines, refrigerators and other home appliances. Assembly lines for
TVs began operating earlier this year.
Samsung also plans to
relocate parts of its TV production lines in Malaysia and kimchi
refrigerator lines in South Korea's Gwangju to this complex.
Samsung Electronics will expand its investment size there from $1.4 billion to $2 billion by 2020, the sources said.
In return, the city government of Ho Chi Minh decided last week to give further tax benefits to the tech giant, they said.
Seoul-based
LED manufacturer Lumens Co. will begin operating its factory in
September located in the southern province of Binh Duong which is
currently under construction.
Lumens currently produces LEDs that
are used for various products ranging from televisions to smartphones.
The company also works with Samsung Electronics.
LG Electronics
Inc., South Korea's No. 2 tech giant, also opened a new production base
in Haiphong, a northern port city of the country, that will manufacture
the company's key products for exports.
The 800,000-square-meter
Vietnam Haiphong Campus will allow LG to produce price-competitive
electronics, including its globally sold smartphones and TVs, the
company said. It plans to spend US$1.5 billion on the complex through
2028.
South Korean flat-screen maker LG Display Co. also plans to
build a new production line in Haiphong with $1 billion and begin
production next year.
Vietnam stands out as an attractive investment destination as a monthly minimum wage is about 59 percent that of China.
Also, the Southeast Asian country has a population of over 90 million and 60 percent are in their 30s or younger.
"Vietnam
has a very good investment condition as labor cost is very cheap and 54
million is a labor population," said Park Byung-book, chief of the
Korea Trade-Investment Promotion Agency's branch office in Hanoi. "Tech
firms are increasingly making inroads into Vietnam, which used to be
favored by textile or sewing firms in the past."
Also, KOTRA said the Vietnamese government is making various efforts to lure more South Korean investments. (Yonhap)
http://www.koreaherald.com/view.php?ud=20160809001008
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