Samsung to Invest $3 Billion More in Vietnam

Samsung has announced plans to invest up to $3 billion in a new smartphone factory in Vietnam, to operate alongside its existing facility in Thai Nguyen, close to the capital Hanoi, which was opened in March this year with a $2 billion investment. The addition of a new mobile phone manufacturing plant could significantly boost Samsung’s smartphone operations in Vietnam. Since 2009 the company has operated a $2.5 billion plant in northern Bac Ninh province and in the summer, Samsung secured approval from the Vietnamese government to build a $1 billion factory there to make displays for smartphones and tablets (Display Monitor Vol. 21 No 24).

Last month Samsung reported its weakest quarterly operating profit in three years, following a steep decline in earnings from its mobile business (Display Monitor Vol. 21 No 43). Samsung has also seen its dominance of the global smartphone market be eroded in recent months by companies such as China’s Xiaomi and Lenovo, whose smartphones perform as well as Samsung’s but which cost less. At the same time that Samsung announced its Q3 results, the company said that it will pursue a new strategy aimed at the mid- to low-end smartphone market, targeting stronger growth in the emerging markets. Establishing more manufacturing bases in countries such as Vietnam will also enable Samsung to reduce its operating costs, where average monthly wages are considerably lower than in China.

The final details of Samsung’s investment in Vietnam are to still to be confirmed