| Date: 26/03/2008 With Samsung considering building a factory worth somewhere between hundreds of millions of U.S dollars and US$1 billion in the northern region and Taiwan's Foxconn Technology Group planning to spend US$5 billion in the country, Vietnam is experiencing a wave of investment from the world's leading technology companies. Samsung has yet to officially announce their plans for constructing a Mobile phone plant, but company executives have visited the north and it is likely that the plan will be executed. Once constructed, the factory in northern Vietnam will be one of Samsung's largest in the world. Furthermore, Vietnam is quickly becoming a destination for research, development, manufacturing and assembly as more foreign investors are coming to the country to cash in on the growth potential. Japan investments lead the pack:
Japan currently heads the list of foreign countries investing in Vietnam. Canon, Sanyo. Matsusita, Sony, Fujitsu, Toshiba, Panasonic and Nidec have established factories in Vietnam and are now looking to expand their business in a major way. Canon currently manufactures Printers in Hanoi and Bac Ninh. With 700,000units produced each month and more than US$1billion in annual earnings, Canon wants Vietnam to be their largest printer manufacturer in the world. Canon's operations in Vietnam have expanded greatly during the past five years. The company increased its registered investment to US$370 million and has three factories in northern Vietnam. Nidec Corporation has spent US$1 billion on factories at the Tan Thuan EPZ in HCMC over the past ten years. Last week, the company commissioned two factories at the Saigon Hi-Tech Park (SHTP) in District 9. Nidec President and CEO Shigenobu Nagamori said at the grand opening ceremony that the factories were among 10 projects committed by Nidec Corporation at SHTP with total investment capital of US$1 billion. Once the 10 projects are completed in 2010, they will employ 30,000 people, said Nagamori. He also added that Vietnam's investment environment is improving and that the country's high economic growth and skilled labor force were the key reasons for Nidec's investment. Matsushita Electric Industrial will build their 10th offshore Panasonic R & D Center in Vietnam, which will be the company's largest in the Southeast Asian region.
The Hanoi -based center will conduct core technology and software research & development and strengthen embedded software development and manufacturing in Vietnam, Panasonic will experience business efficiencies. American and Taiwanese investments trail close behind
Intel is building a US$1 billion chipset assembly and testing plant at SHTP, which is helping to attract more foreign investors to the sector, according to the Ministry of Planning and Investment. Taiwan's Compal Electronics, the world's second largest contract laptop manufacturer, began construction on a US$500 million laptop factory in the northern province of Vinh Phuc late last year. The factory, which is the largest high-tech project in northern Vietnam, will span 100 hectares at Ba Thien Industrial Park in Binh Xuyen District and will produce 24 million laptops annually. Additional product lines include monitors, peripherals, LCD television and electronics.
The Taiwanese company will export all of its output worth billions in estimated annual revenue. Once the first phase of the factory is up and running in the third quarter of 2009, an estimated 40,000 Jobs will be created. Compal plans to call ten companies to invest in Vietnam in order to supply their laptop factory, bringing total investment to US$1 billion and total of 200,000 jobs. Compal believes that Vietnam is a good destination for producing low-end product due to the low cost of factories. According to experts from the foreign investment agency, Compal's investment in Vietnam may have been a result of Intel's US$1 billion chip assembly and testing project in HCMC. Taiwan's top electronics manufacturer Foxconn has two factories at the Que Vo Industrial Zone in the northern province of Bac Ninh. Foxconn produces high - end products for Apple, Nokia, Sony, Intel and Microsoft. The Company plans to invest up to US$5 billion in the provinces of Bac Giang, Bac Ninh and HCMC, others among and generate annual export revenues of US$ 10 billion. The Company said that the factory will be the single, largest factory for Intel within its chip assembly and testing network. The factory will produce chipsets worth around US$ 5 billion annually. In additional to Compal, Intel and Nidec, Matsushita Electric , which manufacturers Panasonic products, Jabil, and Renesas Technology Corp. are planning to build research & development centers in Vietnam. With billions of dollars in foreign direct investment from the world's leading technology firms pouring into the country, experts are advising Vietnamese authorities to build basic infrastructure and provide the training necessary to meet labor demands. Low wages, Government perks attract further investment
Lower wages, preferential tax breaks promised by the Vietnamese Government and certain internal and external factors are the prime motivators for investment in Vietnam. Multinational companies are constantly looking for cost - effective means of conducting business that maintains a certain level of quality.
Vietnam has also made great strides in regards to economic reforms, especially in 2001 when the country signed the Bilateral Trade Agreement (BTA) with the U.S and began transforming its law to comply with the BTA. This in turn prepared Vietnam for its entry into the WTO in early 2007. According to investors, Vietnam has done a good job of attracting potential investors to date with the Government playing an essential role. Experts believe that in terms of cost, Vietnam is as economically viable as China. However, the "support labor cost" factor may help propel Vietnam as an efficient destination especially for electronics outsourcing. The support labor cost is important in production of high -mix /low -volume products, and the lower support cost in Vietnam has made the country an apt location for contract manufacturing. According to representative of Renesas Technology Corp. , Vietnam is a "hardworking and highly diligent nation" The company established the Renesas Design Vietnam, one of its main design centers for developing advanced system LSI, in 2004. Vietnam's 85 million inhabitants are over 95% literate. Having a smaller land mass allows for easy centralized management and diversification in the labor pool for a company. Additionally, over half of the population is under 35, which provides career longevity for employers. Vietnam's greatest strength is its educated and young population that is open to learning an adopting new ways to improve its economy. The country's tax system needs to be revised to include incentives for domestic and private investment. | 
