Samsung Vietnam: Where dreams come true

Samsung Vietnam: Where dreams come true

In 2023, Samsung Electronics Vietnam Thai Nguyen (SEVT) officially celebrated 10 years in Vietnam.

When construction began a decade ago, Yen Binh Industrial Park in the northern province of Thai Nguyen was still a wild vast land, luxuriant with weeds. Even the road leading from the national highway to the project area was still a dirt road. But now, in the middle of Yen Binh is a large and beautiful factory with modern connections, akin to a high-tech city.

“Ten years ago, after its factory in Bac Ninh, Samsung decided to choose Thai Nguyen for its second mobile device factory in Vietnam,” said Choi Joo Ho, president of Samsung Vietnam Complex.

SEVT started construction in 2013, with an initial investment of $2 billion. Exactly a year later, the factory officially went into operation. At the same time, Samsung decided to invest an additional $3 billion.

After only the first 20 days of operation, SEVT exported $90 million - unprecedented in the history of Samsung Mobile globally. In just the first year, the number jumped to $8 billion. A decade later, 925 million phones have been shipped from SEVT, with export turnover of tens of billions of USD per year.

Most importantly, SEVT has created job opportunities for 150,000 people, of which more than 79,000 employees are from Thai Nguyen, including people from ethnic minorities and disadvantaged and remote regions. Within its lifetime thus far, SEVT has contributed just over $1 billion to the state budget.

For these contributions, in 2023 SEVT was awarded the Third-class Labour Medal, which Deputy Prime Minister Le Minh Khai personally presented. Leaders of Thai Nguyen province also awarded honourable banners – much deserved rewards for SEVT officers and employees’ extraordinary efforts.

“What’s special is that the SEVT factory has developed into Samsung’s main global mobile phone production base, and produces key components to supply manufacturing plants around the world. Some products include metal frames in 2014, 3D glasses in 2015, and FTG ultra-thin glass for folding phones in 2021,” said Choi Joo Ho.

President of SEVT Park Sung Ho said that with the production of mobile phones in the past 10 years about to reach one billion, SEVT is already Samsung’s largest factory in the world, maintaining a stable production with the highest output of the group.

“We can be proud of what we have done and firmly believe in the future ahead. With the consensus of the leadership and all employees, we will overcome all challenges together. Each of us may be very ordinary, but together, we will create extraordinary things,” Park Sung Ho said.

Working towards miracles

Along with SEVT’s 10-year journey, 2023 is also a milestone marking 15 years of Samsung’s mega investment plan in Vietnam.

In 2008, Samsung received an investment certificate and started construction of the first mobile phone factory in Vietnam - Samsung Electronics Vietnam (SEV) in the northern province of Bac Ninh. Initially, the project only had an investment of $670 million. But rapidly after that, the figure increased to $2.5 billion.

At the same time of investing heavily in Bac Ninh, Samsung also continued to expand and invest in many other localities in Vietnam, with Thai Nguyen a prime example. Ho Chi Minh City also has the largest household appliance factory in Southeast Asia (SEHC). The factories do not only belong to Samsung Electronics but also Samsung Electro-Mechanics Vietnam (SEMV) in Thai Nguyen or Samsung Display Vietnam (SDV) in Bac Ninh, all with huge and constantly increasing capital scale.

In the early years, even the most optimistic Samsung member would not expect investment capital in Vietnam to reach $20 billion, nearly 30 times higher than the initial number. That said, the figure will continue to grow.

During a visit to Vietnam in 2022, Roh Tae-Moon, president and head of Samsung Electronics’ Mobile Experience Division, said that Samsung would invest an additional $3.3 billion in Vietnam.

Along with the increase in investment scale, Samsung’s contributions to Vietnam’s economy and society are also constantly increasing.

In the first year of operation, SEV achieved an export turnover of $245 million, and quickly after that, reached the milestones of $2 billion and $3 billion. By 2012, the export turnover was $12.72 billion. At that time, it was hard to believe that just one factory contributed more than 11 per cent of the country’s total export turnover of $114.6 billion.

After SEVT, SEMV, SEHC, and SDV went into operation, Samsung’s contributions to Vietnam’s goods trade jumped even more. In 2017, Samsung, with an export turnover of over $54 billion, contributed over one-quarter of Vietnam’s total export turnover.

Between 2018 and 2022, Samsung contributed over $306 billion in export turnover to Vietnam. In particular, in 2022 alone, the achieved figure is still up to $65 billion, making an important contribution to bringing Vietnam’s total export turnover to surpass $700 billion for the first time, reaching more than $732 billion.

In addition, after Samsung’s appearance in the country, dozens of satellite manufacturers have entered Vietnam, with capital scale of billions of US dollars. Not only that, Samsung has brought a series of large technology corporations to Vietnam to establish a global production base.

Economic expert Tran Dinh Thien once said that Samsung should be positioned as a strategic national partner, with the implication that the company will not only help increase production capacity, but more importantly, creates economic axes and pulls Vietnam to a higher level of development.

Indeed, before Samsung, no-one thought that Vietnam could become the world’s leading major electronics and mobile device manufacturing centre today. Samsung, step by step, has turned Vietnam into a global production base and pulled Vietnam up the ladder of the value chain – but many other technology giants, such as LG, Apple, and Intel have also joined the journey. Together with Samsung, they have invested more and more and contributed to Vietnam’s economic and social development.

In a recent meeting with Samsung leaders, Nguyen Anh Tuan, Secretary of Bac Ninh Party Committee, emphasised the company’s positive contributions in bringing the province’s industrial production value and export value targets to the next level. Meanwhile, Secretary of Thai Nguyen Party Committee Nguyen Thi Thanh Hai stated that the province has seen a great contribution from Samsung Group, especially in terms of budget revenue, export, job creation, and social security work.

The presence of Samsung in Vietnam has also enabled domestic businesses to participate more deeply in the global value chain and contribute significantly to the development of the electronics industry here. Currently, the number of Vietnam’s tier-1 and tier-2 suppliers in Samsung’s global supply chain has increased from 25 enterprises in 2014 to 257 by the end of last year.

Therefore, after personally awarding SEVT the Third-class Labour Medal, Deputy Prime Minister Le Minh Khai said, “This is an important milestone, marking the 10-year process of construction and development of Samsung Electronics Vietnam Thai Nguyen, and Samsung Group in general in Vietnam. This is also a clear demonstration of the deep, practical, and efficient cooperation relationship between Vietnam and South Korea.”

Where dreams come true

At the end of last year, Samsung officially inaugurated a $220 million research and development (R&D) centre in Hanoi’s Tay Ho district, officially completing the picture of strategic investment in Vietnam.

“Gone are the days when Vietnam was a low-cost production base for global companies,” stated The Korea Herald on the occasion of Samsung chairman Jay Y. Lee’s visit to Vietnam to mark the centre’s opening. This newspaper noted that the new R&D centre is the culmination of Samsung’s decades-long commitment to Vietnam.

After 15 years in Vietnam, Samsung not only makes an important contribution to bringing Vietnam deeper into the global value chain, but now is also starting to pull Vietnam into the global R&D playground. This is even more meaningful in the context that Vietnam is considering innovation as one of the important growth drivers of the economy and is trying to build a national innovation centre, with the expectation of turning the country into a cradle of research and creativity for the region and beyond.

Roh Tae-Moon, when accompanying chairman Jay Y. Lee to Vietnam to attend the inauguration of the R&D centre, said that Samsung will improve its professional capacity and expand the development field so that the centre does not only become the leading R&D centre in Southeast Asia, but also number one in the world.

“Samsung will also strengthen the research force so that products and services developed in Vietnam can be brought to consumers around the world, not just in development activities focusing on Southeast Asia,” said Roh Tae-Moon. “What is more, I expect mature talent at the centre to contribute to improving Vietnam’s industrial competitiveness.”

That is a great gift for Vietnam because for a long time, Vietnam has wanted foreign investors to bring ventures of such upstream nature, so that Vietnamese workers not only have the opportunity to step from the farm to the factory, but also to access, learn, and channel the world’s top technologies.

The opportunity for Vietnam to step up the ladder of the global value chain will therefore be higher, especially when in a short time, the SEMV factory will mass produce transistor chip grids. Although it is only manufacturing semiconductor components, this will still be “a good start for the group’s goal” of closing the production chain in electronics in Vietnam, Prime Minister Pham Minh Chinh assessed.

For a long time, Vietnamese top leaders have wanted Samsung to continue to expand its investment and business activities into the semiconductor field and consider Vietnam as the most important base with a more comprehensive global strategy in production and R&D of key products to the international market.

Park Sung Ho said that now is the time to prepare strategies for the next 10 and 20 years.

“As the president of the company, I hope that together we can write history for a new future. Samsung Vietnam is where dreams come true,” he said. “We hope SEVT will be the place to turn my dreams, the dreams of all employees, and the dreams of Samsung Vietnam reaching out to the world, into reality. And with that, the dreams of Vietnam will come true because Samsung Vietnam is very honoured and proud to be able to contribute its small part in the process of bringing Vietnam’s economy to reach new heights.”

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