Phone giants poured into Vietnam

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Phone giants poured into Vietnam

July 19, 2022
(PLO)- The important product lines of Apple such as iPad, AirPods, MacBook ... have been manufactured in our country and exported around the world.
Vietnam (VN) has demonstrated its ability to rise up the supply chain to become an important manufacturing hub for the global phone industry.


Vietnam has become a place of production, assembly, consumption... of most world-class phone manufacturers. Photo: PM

Many leading phone lines made in Vietnam

A representative of Chinese phone company (China) Xiaomi has just said that shipments of "made in Vietnam" smartphones have been sold around the world. This is quite surprising news because Xiaomi phones are mainly made in China.

In fact, DBG Technology VN Company, a partner of Xiaomi, is the unit that built the phone assembly factory in Thai Nguyen. This factory was put into operation at the end of last year, with the expectation of producing 20 million products per year not only phones but also computers, home electronics, electronic components...

Commenting on this event, Assoc. Not to mention they want to take advantage of tax incentives, labor costs, skilled labor as well as being close to the Chinese market.

“Due to the COVID-19 epidemic and increased logistics costs, Xiaomi's shipping price increases leading to an increase in final costs, so moving production to Vietnam will help reduce costs and increase availability” - Mr. Rajkishore Nayak explained.

Reuters news agency also recently said that Pegatron - Apple's iPhone manufacturing partner is planning to expand factories in other countries outside the Chinese market, including Vietnam. The Pegatron company explained that China's continuous implementation of a strict anti-epidemic policy has greatly affected the operation of iPhone assembly plants in Shanghai and Kunshan. There was even a time when the company had to stop operating the factory, affecting production and delivery plans, not to mention labor shortage.

“We are constantly faced with unexpected COVID-19 control measures, and it is very difficult to control every activity. Therefore, Pegatron has planned to expand production plants in Vietnam, India, Indonesia and North America to solve the above situations as well as expand production scale "- a representative of Pegatron said at the general meeting. last annual winter.

It is entirely possible for Vietnam to produce iPhone phones. Because the important product lines of Apple such as iPad, AirPods, MacBook ... have been manufactured in our country and exported around the world. In addition, the leading phone lines of Samsung, LG, Google ... are all manufactured in Vietnam.

There are many advantages but…

Economist Tran Thanh Hai said that Vietnam can completely become the world's phone factory, competing on an equal footing with China. This is thanks to Vietnam's electronics manufacturing industry reaching the continental level. Currently, Vietnam is in the top 10 countries in terms of electronics exports.

Samsung and Intel can be considered as the first generation of foreign investors to lay the foundation for the electronics manufacturing industry. Until now, Vietnam is the leading electronics manufacturing center of many other global giants, including LG, Foxconn and Canon.

In fact, Vietnam is known as a country with strengths in assembling activities of finished products and sub-assemblies for export. Because with phones, the design, sales, and distribution are all located abroad. As a result, Vietnam has become the main production and assembly destination for most of the world-class mobile phone manufacturers.

In particular, Vietnamese domestic companies have been improving their competitiveness as they participate more and more in the supply chains of large manufacturers. For example, the number of tier-1 suppliers of domestic companies to Samsung has increased rapidly in the past few years.

In the same opinion, Dr. Majo George, RMIT Vietnam University, acknowledged that another advantage of Vietnam in the phone industry is that multinational companies have established outstanding supply chains for a long time, including complex configurations. The most complicated is the chip. This makes it easy for phone manufacturers to source materials at a reasonable cost.

“Vietnam’s supporting industries also play an important role in the global value chain, including smartphone manufacturing. Vietnam also has remarkably low labor costs and is only about 1/3 of China's. Free trade agreements also contribute significantly to cost savings to create competition among major phone companies," said Dr. Majo George.

However, experts note that Vietnam still needs to be vigilant in the context that the world economy is facing many difficulties due to the Russia-Ukraine war, high gasoline prices, escalating raw materials, and supply chain disruptions. ... That is not to mention Vietnam still lacks skilled human resources; infrastructure, logistics has not really developed.

Notably, according to experts at HSBC, supply chain disruptions in China can make it difficult for Vietnamese manufacturing companies to secure input materials for export activities in the future. future. Because about 30% of Vietnam's imports come from China, mainly in the field of electronics with 30% and equipment and machinery 22%.•

The world's second largest smartphone exporter


In a recently published report, HSBC said that Vietnam's phone industry emerged largely from Samsung's FDI inflows. Over the past 20 years, Samsung has invested 18 billion USD in Vietnam.

The chain effect from the success of Samsung, Intel and other giant technology corporations also accelerated the process of redirecting the supply chain to Vietnam. Currently, Vietnam's smartphone market share globally has increased significantly. Although still behind China, occupying the top position in the world's phone production, Vietnam has gained 13% of the market share, quickly rising to become the second largest smartphone exporter in the world.

In addition to smartphones, Vietnam's laptop market share in the world is also gradually increasing, surpassing Malaysia to become the main producer in the ASEAN region. Especially, Vietnam has also risen to become a country providing microprocessors and controllers.

 

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