In addition to Apple, many other technology giants have also begun to offer cooperation, setting up factories in Vietnam.
Home to many different industrial parks, Hai Phong port city is in the sights of electronic component processing firms in building factories and manufacturing equipment in Vietnam.
“We not only sell land, what we sell is also the future of this area,” said Mr. Tuan, Business Manager at Deep C Industrial Park Complex (Dinh Vu Industrial Park – Hai Phong), told Rest of World.
Large piece of cake for Vietnam
This industrial park is the destination of Pegatron Group, a leading supplier of components for giants like Apple and Microsoft with tens of thousands of employees.
According to Rest of World, this is just one of many businesses following the infrastructure upgrade fever in the North to attract electronics manufacturers to leave China for Vietnam. “Revenue in the last five years is almost half of what it took us 20 years to achieve,” said Bruno Jaspaert, CEO of Deep C.
Foxconn has invested more than 300 million USD to sublease 50.5 hectares of land in Quang Chau Industrial Park (Bac Giang). Photo: New York Times.
In addition to changes in infrastructure and factories, Vietnam also becomes a promising destination for firms thanks to tax incentives, free trade agreements and the goal of sustainable economic development, Rest of World said.
However, the fact that factories grow up too quickly also prevents utilities from keeping pace. In Bac Giang, housing units advertised as “premium” for workers appeared among the vacant lots overgrown with weeds.
This housing complex looks very flashy, equipped with air conditioning inside and billboards in many different languages to attract foreigners to stay. But up to half of the rooms are empty, no one lives.
Speaking to Rest of World, Mr. Minh Hoang, project manager at Hai Long Construction Joint Stock Company in Hai Phong, said that amid the US-China trade tensions, the country’s small suppliers have started looking to his company to build a factory. But recently, big brands have also offered to cooperate.
For example, this year, Hai Long company built a new factory for LG Display and just signed a contract with Amkor Technology, a large American semiconductor manufacturer. “Projects are getting bigger and bigger and the requirements set by the partners are also increasingly strict,” said Mr. Hoang.
In particular, Apple is one of the big names that are gradually moving production lines from China to Vietnam. Its partners have started manufacturing iPad, Apple Watch, MacBook and AirPod in our country.
In 2015, only eight Apple suppliers had factories in Vietnam. But that number has been raised to 26 factories by this year. In which, there are factories responsible for assembling and testing semiconductor components, packaging and processing circuit boards.
Vietnam creates favorable conditions for foreign businesses
But the problem is that none of these suppliers are Vietnamese. In fact, domestic enterprises in the field of supplying components do not have the same priorities in real estate or investment scale as foreign companies.
“Vietnam is rolling out the red carpet for foreign investors. Our country has exempted many taxes to attract them,” Ms. Truong Thi Chi Binh, Vice President and General Secretary of the Vietnam Supporting Industry Association, told Rest of World.
Therefore, Vietnam still lacks domestic component suppliers, so it will be difficult to emerge in this field, said Timothy Sturgeon, a researcher at the Massachusetts Institute of Technology’s Industrial Performance Center.
“Apple and many other brands will come to Vietnam with their outsourcing partners from all over the world, but there are no domestic names,” he added.
Many technology giants have decided to move production out of China, to countries like Vietnam or India. Photo: Getty Images.
Sharing with Rest of World, Nguyen Van Man said that his company has been responsible for producing packaging and printing for big brands such as Samsung, Sharp and Mitsubishi. However, when he heard that Apple would move its supply chain to Vietnam, he thought that he would have no hope of cooperating with the corporation.
Mr. Man said that this case is like a “stick and carrot”, with rewards and punishments for cooperating with them. “But this carrot is not easy to eat,” he told Rest of World. Mr. Man also said that he once lost a large contract with an American partner because he did not have a large enough yard for workers to escape when there was a fire.
“They just borrow our land and our workers to export their products,” he said. Therefore, he thinks that Vietnamese businesses should not compete with each other just to win a piece of cake from these technology giants.
@ Zing News
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Source: Vietnam Insider