Samsung, LG to invest billions more in Vietnam

SOUTH KOREAN electronics giants Samsung and LG will pour billions of dollars of additional investment into Vietnam, said the Vietnamese government and state media reports on Tuesday (Dec 6).

The announcement came after Samsung Electronics, the largest single foreign investor in Vietnam, cut smartphone production in the South-east Asian country twice this year due to weaker global demand. Samsung produces about half its smartphones in Vietnam and accounts for nearly a fifth of the country’s overall exports.

The company will invest an additional US$2 billion in Vietnam, raising its total investment to US$20 billion. State-run Vietnam News Agency said that the new investment will further solidify Vietnam as Samsung’s key production site.

The agency also said that Vietnamese President Nguyen Xuan Phuc and Samsung chief executive Han Jong-hee met in Seoul on Tuesday.

Samsung did not immediately respond to a request for comments.

Separately, the Vietnamese government said that LG Electronics will also invest an additional amount of US$4 billion in the country to turn it into a smartphone camera production hub. 

While neither the government nor state media provided further details on the two companies’ investments, it is known that LG has so far invested US$5.3 billion in Vietnam to make products such as electronic home appliances, cameras and car parts.

LG also did not immediately respond to a request for comments.

The announcements came as Vietnam and South Korea said on Tuesday that they upgraded their relations to a “comprehensive strategic partnership”, which Vietnam has so far established only with China, Russia and India.

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Vietnam and South Korea aim to raise their bilateral trade to US$100 billion next year, and to US$150 billion per year by 2030. Last year, they recorded a figure of US$78 billion.

Over the last decade, Vietnam has emerged as one of the most attractive production hubs for electronics companies, but weakening global demand has prompted production cuts this year. REUTERS