Compal chooses phones in Vietnam return plan

The world’s second largest notebook producer is looking to switch to phones at its Vinh Phuc based plant
Photo: Ngoc Linh

Taiwanese media two weeks ago quoted Gary Lu, chief financial officer and also spokesman at Compal, as saying that Compal planned to move part of its production to its Vietnam factory, which it closed in 2013, given the rising costs in China.

The factory was expected to begin mass production around mid-year with a monthly capacity of less than 100,000 units, Lu added.

Lu did not respond request for further comment from last week.

Compal in 2007 announced it would invest $500 million to build a notebook production plant in Vinh Phuc province, 40 kilometres from Hanoi. The investment also included an industrial park serving the company’s suppliers. The construction of the factory was completed, but Compal suspended production in early 2013. Currently, the factory is rented by a local company to manufacture carton boxes for Samsung Electronics.

Vinh Phuc’s Industrial Parks Management Authority deputy director Bui Van Quy told VIR that Compal had already made a date with the authority in March to discuss the future of the factory.

Lu said Compal would make smartphones in Vietnam, instead of notebooks as initially planned.

Amid the decline in the notebook business, Compal in recent years has diversified its business to non-notebook products such as smartphones, tablets, televisions, servers and automobile electronics.

Compal’s smartphone clients include Microsoft, HTC, Sony, and Lenovo. The company’s first-quarter shipment of smartphones and tablets was set for a double-digit increase on the back of orders from new clients, Lu said.

If Compal moves its smartphones production to Vietnam, it will contribute to strengthening the role of Vietnam in the global smartphone production chain, following the investment of other smartphone makers like Samsung and Microsoft.

While Compal is indicating it intends to resume production in Vinh Phuc, fellow Taiwanese electronics contractor Foxconn has remained silent.

Foxconn received an investment certificate in 2008 to building a $200 million mobile-phone manufacturing plant in Vinh Phuc and also an industrial park for suppliers, near Compal’s factory. However, Foxconn has never built a factory. Vinh Phuc People’s Committee has many times urged the company to implement its investment commitment.