October 15, 2012
By Kim Yoo-chul
Samsung Electronics plans to build a second handset plant in Vietnam as it looks to boost its manufacturing capacity amid a global smartphone boom and an intensifying rivalry with Apple. The company confirmed Sunday it is in final talks with the Vietnamese government over the establishment of the $700 million factory.
Samsung Electronics Vietnam (SEV) is considering the northern Vietnamese city of Thai Nguyen, which currently depends on agriculture, as the location for the second plant. Thai Nguyen’s location provides great accessibility to Vietnam’s major cities, said a Samsung official.
Thai Nguyen is some 70 kilometers from the Vietnamese capital of Hanoi and the construction of a set of highways linking Hanoi to regional cities is expected to be completed around 2015.
Samsung has been operating a handset plant at the Yen Phong Industrial Zone in Bac Ninh. Since 2009, it has been leading Samsung’s overseas handset plants in terms of production, pumping out 150 million per year, which accounts for one-fourth of the company’s annual output.
Total investment in Vietnam by 2020 will be increased to $2.2 billion including $700 million for our second Vietnamese plant, said the Samsung official.
Samsung Electronics Chairman Lee Kun-hee proposed the new deal in a recent meeting with Vietnam’s vice premier and the Southeast Asian country promised to offer big tax and administrative incentives in a bid to attract more investment from the South Korean firm.
The additional investment decision is thanks to Vietnam’s full support. We will increase the number of hires and investment contingent on prevailing conditions, said the Samsung official. SEV aims to reap $10 billion in revenue this year.
Samsung is currently involved in a global patent war with Apple. Samsung has recently been aggressively flexing its investment muscle in emerging economies to strengthen its manufacturing prowess and squeeze its biggest rival and friend in the smartphone race.
Photo Credit: The Korea Times