Samsung may struggle to keep local position for Foxconn's plan

Foxconn plans to open an iPhone manufacturing facility in Vietnam

Speaking at a meeting with the prime minister in the afternoon of November 22, Vu Tien Loc, director of Vietnam Chamber of Commerce and Industry (VCCI), revealed that China-based Foxconn Group and the Hanoi People’s Committee are working together to open an iPhone manufacturing facility in Vietnam to negate the impacts of the US-China trade war.

Discussing with VIR the impact of this potential iPhone facility on Samsung Vietnam, Tran Toan Thang, director of the MPI’s National centre for socio-economic information and information, said Samsung’s local input suppliers and plan to recruit local labourers will be impacted.

“They have already been competing to gain labourers because there is no longer an excess of labour force. Thus, the competition will mainly occur at the areas where there is still ample labour force,” Thang added. “Second,the move will also benefit local supporting suppliers. Samsung prescribes strict standards for its input suppliers because there are more suppliers than it needs, so Samsung can cherry-pick at leisure. Thus, the appearance of another big firm running in the same segment will bring local suppliers more chances to enter into co-operation with foreign investors.”

Over the past few years, Samsung has kept its position as the leading smartphone manufacturer in Vietnam. Accordingly, the total number of Samsung smartphones manufactured in the country accounted for one-third of its global smartphone production.

In fact, Samsung smartphones and Apple’s iPhone have long been competing for the title of the world’s leading smartphone brand. As a result, the occurrence of Foxconn’s iPhone manufacturing facility in Vietnam may break Samsung's reign over suppliers.