Overview:

Ever since 2018 and the deterioration in the trade relations between the US and China, various electronic manufacturers are moving production away to Vietnam. Samsung closed its mobile phone manufacturing facilities in Shenzhen and Tianjin in 2018 while expanded investment to Vietnam. Soon, we also saw Nintendo asking Foxconn to move a part of the production of the Switch to Vietnam. Foxconn is also considering moving part of iPhone production lines to Vietnam, and its subsidiary Sharp is planning to move PC production to Taiwan and Vietnam.

So why are companies picking Vietnam as the manufacturing alternative for China? Will Vietnam be able to challenge China’s manufacturing leadership in the global electronics industry? In this short report, we answer these questions.

Table of Contents:

Vietnam’s Strengths in Manufacturing

• Lower trade tariffs
• Lower CIT (Corporate Income Tax)
• Mature industrial zones and supporting facilities
• Labor dividend and lower manufacturing wages

Risks and Challenges of Manufacturing in Vietnam

• Soaring land rent prices
• Relying on China for import of components
• Incomplete national transportation system
• Government corruption
• Labour quality and working ethics

Viewpoints 

Author: Flora Tang
Number of Pages: 9
Published Date: August 2019