Electronics Production | July 16, 2007

Electronics manufacturers eyes Vietnam

Vietnam has traditionally been an important producer of clothes, furniture and a great exporter of rice and catfish but now the electronics industry is getting more and more important in the country that has the fastest growth rate in the region next after China, according to local Vietnamese newspapers.
In Vietnam there are about 10 million mobile phone users and processor maker Intel expects that in Hanoi and Ho Chi Minh City there will soon be a computer using percentage of 50%.

The growing middle class is buying iPods, mobile phones and personal computers.

Investors are now helping Vietnam becoming Asia's next big center for electronics manufacturing. Intel announced one year ago that the company was building a semiconductor test-and-assembly facility in Vietnam. Intel's investment of about $1 billion has helped attract other IT investors.

After Intel many others have followed. Suppliers and customers to Intel and even other companies interested in Vietnam's opportunities have launched investment programs in Vietnam, for example Jabil who said it will invest some $100 million at its facility in Saigon Hi-Tech Park in Ho Chi Minh City, where it makes laser printers for HP. EMS provider Foxconn said it will invest some $5 billion. The company is expected to engage 30,000 workers at its manufacturing of electronics and computer products including digital cameras, personal computer printed circuit motherboards and music players. Compal electronics will invest $500 million to build notebook PCs in Vietnam and it also plans to expand into LCD (liquid crystal display) TVs. Allied Technologies of Singapore operates three separate divisions supplying Jabil. In operation since 2005, it now employs 250 workers in metal stamping, plastic molding and extrusion facilities for parts Jabil uses to produce HP printers. Altera and Renesas are also looking at Vietnam and said they will establish manufacturing and R&D centres there.

The government aims to see the electronics exports grow to as much as $5 billion by 2010. According to the Vietnam Electronics Industry Association, exports last year totaled $1.4 billion, a 34.1% increase over 2005.


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