Intel had been the largest foreign investor in the Saigon Hi-Tech Park (SHTP), Ho Chi Minh City’s hi-tech hub, until Samsung Electronics broke ground on a US$1.4 billion complex there on Tuesday, only seven months after it was licensed to do so. The Samsung Electronics Ho Chi Minh City Complex (SEHC) will become an important part of the global supply chain of Samsung TVs, Kim Jong Ho, president of consumer electronics with the South Korean firm, said at the groundbreaking ceremony. The SEHC, spanning 70 hectares inside the SHTP, will focus on research and development and the production of high-end TV products such as SUHD TV, Smart TV and LED TV, besides other consumer electronics products, during its first phase of operation. The complex is slated to go into operation in the second quarter of next year, and is expected to generate 15,000 jobs. Its products will mostly be exported. The SEHC project received an investment license in October 2014. Kim said Samsung sees Vietnam not only as an investment destination but its home. The latest investment indicates the company’s continual belief in strong development with Vietnam in the future, he added. Since initially investing in Vietnam in 1995, Samsung has operated seven projects worth a total of $11.3 billion in the Southeast Asian country. The two biggest among these are the Samsung complexes in Bac Ninh (SEV) and Thai Nguyen (SEVT), both northern provinces, into which the company has so far channeled $2.5 billion and $5 billion, respectively. Other major Samsung projects in Vietnam include a $1 billion screen-making plant in Bac Ninh and a $1.23 billion facility that produces high density interconnect (HDI) boards in Thai Nguyen. Samsung is seeking permission to increase its investment at the Bac Ninh display plant to $3 billion, Vietnamese Minister of Science and Technology Nguyen Quan revealed. “This affirms Samsung’s plan to choose Vietnam as its global production base,” he said. The SEV and SEVT collectively posted $26.3 billion in export turnover in 2014, accounting for 17.5 percent of Vietnam’s total export revenue. Finding local suppliers Despite the huge number of Samsung projects in Vietnam, only a few local suppliers are qualified to join the production chains of these facilities. Most of the Vietnam part suppliers fail to meet the high standards set by Samsung, which thus has to source components from other South Korean firms. Nguyen Van Dao, deputy general director of Samsung Vina, the Vietnamese unit of Samsung, said the SEHC will work with the SHTP managers to find qualified local suppliers for the facility. Le Hoai Quoc, head of the SHTP management board, said 20 local suppliers have passed three rounds of tests by Samsung. “If they make it through the final round, these Vietnamese companies will have the chance to access the Samsung production chain,” Quoc said. SEHC will set up an R&D center for audiovisual devices at the SHTP, which Dao said will help strengthen the development of the hi-tech sector in Ho Chi Minh City. Minister Quan also expressed his hope that Samsung would soon move from assembling and packaging products to manufacturing them in Vietnam through that R&D center. SHTP is home to many international technology businesses, including such popular names as Nidec Sankyo, FPT Software and Intel Products Vietnam. In 2006 Intel pledged a $1 billion investment, the biggest then, in Vietnam and has so far disbursed $450 million.
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