Vietnam’s economy is undergoing a significant transformation, drawing increasing interest from global businesses and investors. Once primarily recognized for low-cost manufacturing in textiles and footwear, the country is now emerging as a hub for more advanced industries.
This shift is driven by a combination of factors, including a young, educated workforce, steady improvements in infrastructure, and progressive legal reforms. Vietnam’s expanding role in global supply chains—alongside its push to develop sectors such as electronics, renewable energy, and electric vehicles—demonstrates a long-term economic vision. These developments are enhancing its competitiveness in the region while creating new opportunities for companies seeking to grow their presence in Asia.
From Assembly Lines to High-Tech Growth: Vietnam’s FDI Shift
Vietnam’s early export-driven growth relied heavily on labor-intensive sectors like textiles and footwear. In the past decade, however, the country has taken firm steps toward becoming a center for high-value, technology-driven manufacturing. LG Display Co. Ltd, for instance, has announced an additional $1 billion investment to expand its factory in northern Hai Phong, bringing its total investment in Vietnam to $5.65 billion. Meanwhile, Google now manufactures its Pixel phones in the country, and Apple has shifted the production of AirPods and Apple Watches to trusted local suppliers like Luxshare and Goertek.
These moves reflect Vietnam’s rising industrial capabilities and the growing experience of its workforce in fields like precision assembly and automation. The government supports this trend through vocational training and educational initiatives that align with industry needs. Collaborations between multinational corporations and local partners are accelerating technology transfer and building stronger supply networks.
In this video, we explore the emerging business trends in Vietnam and share practical insights on why investing in the country is a smart move for businesses.
Legal Reforms That Attract Investment
Vietnam has improved its legal and administrative framework to encourage high-tech investment. In 2023, changes to the Investment Law made it easier to obtain licenses and offered tax breaks of up to 15 years for strategic sectors such as high-tech, research, and clean energy. These measures have encouraged both new entrants and existing investors like Foxconn to expand operations.
Alongside tax incentives, Vietnam has strengthened intellectual property protections and eased restrictions on foreign ownership in several sectors. Local authorities in provinces like Bac Ninh, Thai Nguyen, and Binh Duong have also launched fast-track approval programs and one-stop service centers, making it easier for businesses to get started. These legal improvements are closely tied to Vietnam’s physical development, particularly in specialized industrial parks that host entire supply ecosystems.
How Vietnam Compares in the Region
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Among Southeast Asian nations, Vietnam stands out for its balance of cost-efficiency, workforce readiness, and political stability. Labor costs are significantly lower than in China—by about 30–40%—yet the quality and reliability of production continue to rise. Vietnam’s geographic location near key regional players like China, South Korea, and Japan enhances its appeal as a logistics hub.
While countries like Indonesia and the Philippines also seek to attract investment, Vietnam offers a more stable business environment and better trade access. Its participation in trade agreements such as the RCEP and the Vietnam-EU Free Trade Agreement allows manufacturers to benefit from lower tariffs and improved market access. This trade openness boosts Vietnam’s reputation as a global production base.
Infrastructure has kept pace with these developments. The country has built new highways and upgraded ports and airports—including the first phase of Long Thanh International Airport. International shipping companies like Maersk have also invested in Vietnam’s logistics network, making it easier and faster to move goods in and out of the country.
Emerging High-Tech Sectors: Semiconductors, EVs, and Green Energy
Vietnam is channeling its growth efforts into future-oriented industries. The country has attracted significant FDI in its semiconductor ecosystem. Intel’s assembly and test facility in Ho Chi Minh City is one of its largest global operations, while Amkor Technology invested over US$ 1.07 billion in Bac Ninh for a semiconductor packaging facility. Additionally, Foxconn Circuit Precision is developing a US$ 383.33 million factory, and Dutch semiconductor company BE Semiconductor Industries (BESI) is set to launch a new US$ 4.9 million project in Saigon Hi-Tech Park by early 2025.
In December 2024, Nvidia and the Vietnamese government signed an AI cooperation agreement to establish an AI research and development center and an AI data center. Moreover, Nvidia’s acquisition of VinBrain, a health-tech startup under Vingroup, underscores Vietnam’s growing role in AI-integrated semiconductor applications. As global firms seek to diversify chip supply chains away from Taiwan and China, Vietnam is positioning itself as a cost-effective and technically capable alternative.
In the electric vehicle space, the local company VinFast has gained global attention by investing in EV manufacturing and exporting to international markets. Its growth is attracting other firms in related fields, including battery production and automotive electronics. These developments point to Vietnam’s rising role in the regional EV ecosystem.
Green energy is also becoming a cornerstone of Vietnam’s strategy. With abundant solar and wind resources, the country has seen growing interest in renewable energy projects. Government support in the form of investment incentives and feed-in tariffs has made large-scale solar and wind developments more viable. In parallel, Vietnam is becoming a destination for IT and software development, as global firms establish R&D hubs in cities like Ho Chi Minh City and Hanoi.
>> Related article: From Factory to Market: A 2025 Guide to Furniture Quality Inspection in Vietnam
Final Thought: Vietnam’s Growing Value Proposition
Vietnam is no longer just a destination for low-cost manufacturing. It is evolving into a competitive, tech-driven economy supported by young talent, modern infrastructure, and investor-friendly policies. The presence of global companies like Apple, Google, and Intel underscores their growing reputation in high-tech production.
This transformation reflects deeper changes in education, infrastructure, and international partnerships. For global investors and manufacturers, Vietnam now offers a robust, flexible, and forward-looking base in Asia.
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Source: Vietnam Insider