Many foreign investors in hi-tech industries, especially multinational companies, are continuing to pour money into Vietnam even though the world’s economy has yet to completely recover from the global financial crisis. Here are some of the big movers and shakers who have invested in the country.

Hi-tech investors tap Vietnam

Wintek Corporation, a Taiwanese manufacturer of touch screens for Apple iPhones, last month received an investment certificate to build a factory in the northern province of Bac Giang.

The company is well-known for its LCD touch screens worldwide and is one of only two companies worldwide to produce them for the iPad. It will use more than 150,000 square meters of Quang Chau Industrial Zone to locate its factory, which is worth US$250 million.

It will begin manufacturing touch screens for Apple iPhones and iPads this year. The Taiwanese company has also leased 18 hectares of land there to set up other facilities.

Multinational companies are looking for an alternative to China where they can diversify their investments and save on costs, experts said.

The Wintek investment adds to the number of hi-tech companies making inroads into Vietnam, including Samsung, Nokia, Intel Corp. and Canon Inc.

Nokia has entered into a long-term lease to locate its new handheld phone manufacturing facility in the VSIP Bac Ninh Integrated Township and Industrial Park, 20 kilometers from the capital city Hanoi.

Nokia’s first plant in Southeast Asia will be operational by early next year. The 17-hectare plant will play an important role in supplying mobile phones to the region. Nokia will invest US$280 million initially with further investment planned thereafter.

“Nokia’s mobile devices were first launched in Vietnam in 1996 and Nokia is among the top 10 preferred brands in Vietnam,” said Ivan Herd, designated general director for the facility.

“This new manufacturing site will play a key role in our efforts to connect the next billion to the web.” The brand holds the largest share in Vietnam’s mobile phone market, estimated at 50% out of the total US$1 billion worth of mobile phones consumed annually in the country.

Besides directly investing in Vietnam, Nokia also wants to attract providers of mobile applications to the country, with a view to supplying applications from Vietnam to the global market in the future. The Nokia manufacturing plant in Bac Ninh will be the second mobile phone factory in the country after a plant worth US$1 billion was established by Samsung in late 2009.

As such, after Samsung, Nokia has become the second mobile phone manufacturer to set up a factory in Vietnam.

The U.S.-based Emerson has planned to develop a US$20 million project that will make components for mobile phones. It is expected that the factory will be located in Trang Due Industrial Zone in Hai Phong.

In the south, Hewlett-Packard (HP), the world’s largest technology firm, obtained an investment to set up a research and development (R&D) center in HCMC’s Quang Trung Software Park.

HP said the new center in Vietnam, in line with its R&D centers in China and India, would support the firm’s product and service growth in Asia-Pacific. The new investment implies an increase of foreign R&D expenditure in Vietnam.

Germany-based Robert Bosch, the world’s leading supplier of automotive technology and services, last year announced it would build an R&D center in the city.

Meanwhile, First Solar Vietnam Manufacturing Co. Ltd. last month began construction of a factory that will produce thin-film solar power panels and semi-finished products in Dong Nam Industrial Park in the city’s Cu Chi District.

The US$1 billion-plus plant is expected to become operational next year. It will add US$1 billion to the city’s export value per year thereafter. Experts say First Solar’s investment in HCMC signals a trend of moving plants to foreign countries by U.S. solar cell producers.

The moves by these giant foreign firms are what the Vietnamese government has been waiting for, for a long time. It indicates those firms highly appreciate Vietnam’s market and quality of domestic skilled personnel, experts said.

Made-in-Vietnam hi-tech products reaching out to the world

Investment commitments in ICT, electronics and high technology from multinationals are going on stream, helping to define Vietnam’s position on the world ICT map. Many hi-tech products made in the country have been exported worldwide.

Samsung mobile phone factory in Yen Phong Industrial Zone in Bac Ninh province exported US$2 billion worth of products last year, and it plans to raise the figure to US$3 billion this year. The export value of the factory in Bac Ninh is increasing rapidly because the factory has been making smart phones which are valuable in the marketplace.

Je Hyoung Park, chief executive officer of Samsung Vina, said that the factory earned big export revenue owing to its high-priced smart phones shipped to more than 50 markets worldwide. “Export earnings from the cell-phone factory are predicted to reach US$16 billion by 2015, he said.

Meanwhile, GES Vietnam Co. Ltd., a subsidiary of the U.S.-based Global Electronics Service Corporation (GES Inc.), last month shipped the first two 200-mm semiconductor processing equipment to Tokyo Electron, a major semiconductor device manufacturer in Asia.

These state-of-the-art semiconductor processing systems were reproduced and enhanced in GES Vietnam manufacturing facilities located in the city’s Saigon Hi-Tech Park (SHTP).

These are also the first semiconductor processing equipments to be manufactured in the country, GES Vietnam said. Tokyo Electron Ltd. (TEL), one of the world leaders of equipment and processing solutions to the global semiconductor industry, is a long-standing customer/partner of GES. All remanufacturing activities are done at GES manufacturing facilities in the Saigon Hi-Tech Park.

“This achievement along with other successful projects in design, manufacturing and service of Solar, and FPD equipment completed by the company, is a strong indicator that GES and its resource in Vietnam can offer the global high tech capital equipment industry a complete package of technical capabilities, quality manufacturing, on time delivery and cost effective product,” said Don Tran, GES chairman and CEO.

According to experts, this proved that big hi-tech groups now see Vietnam as a more important market in the global value chain. The manufacturers not only aim to set up factories in Vietnam to make products for products, but they also aim to do R&D and more.

Along with Samsung’s large, long-term investment in Vietnam, its satellites around the world have come to Vietnam and expanded their businesses, aiming to supply components and accessories for the plant.

Operations of the cell-phone factory in Yen Phong Industrial Park have attracted more than 30 other manufacturers who have been licensed there to supply accessories and parts to Samsung Electronics.

So, it is certain that the number of these suppliers will soon increase. And in the long term, the province will be home to a network of producers in the ICT industry, greatly contributing to the development of a supporting industry, not only to supply Samsung but also the Vietnamese market in general.

This will create more competition in the domestic market; moreover, it will help manufacturers in the industry not to depend too much on accessory suppliers from abroad, experts said. This expectation has partly been proved through the investment of many ICT and electronics multinationals in Vietnam in the past few years.

For instance, Japan’s Canon invested in some plants in industrial parks in the north and then several of its satellites followed in its footsteps. Canon’s factories in Vietnam produce various items such as bubble jet printers and full-color copying machines at the Thang Long Industrial Park in Hanoi, laser printers at Que Vo Industrial Park and full-color jet printers at Tien Son Industrial Park in Bac Ninh Province.

Besides contributing billions of dollars from exports and providing thousands of jobs for Vietnamese workers, the Canon factories support the development of supporting industries for electronics in the country.

In the south, Intel’s US$1 billion investment in HCMC has been a big topic in the world of investment. The plant, Intel’s seventh chipset factory globally, will support the giant’s activities in the region. Intel’s business partner network includes other multinationals such as Dell, HP and Lenovo as well as hundreds of other equipment manufacturers and local partners.

Experts say that a lot of companies have followed Intel into the Vietnamese market in various sectors ranging from equipment service, material supply, and logistics to moulds and switchboards.

According to experts when the economic crisis comes to an end, other multinationals such as Foxconn, Teco and Compaq will boost their earlier commitments in Vietnam with enormous projects.

So, besides the advantages of strong economic growth, economic potential and human resources, Vietnam must improve its infrastructure and increase the supply of well-trained employees to meet the higher demands of investors.