Vietnam's pharmaceutical industry is entering a historic growth phase, aiming for a market size of USD 20 billion by 2026, yet it has attracted only a modest USD 1.8 billion in foreign direct investment (FDI) so far. This significant gap highlights a massive, untapped potential for pharmaceutical manufacturing. Global pharmaceutical giants like AstraZeneca, Sanofi, Roche, […]
Last week, Apple finalized the relocation of its 11 visual - audio device production factories to Vietnam, marking a significant shift in the company’s global supply chain strategy. This tech giant’s confidence in the Vietnamese manufacturing sector was discussed by Mr. Nguyen Thang Vuong - Europe-America Market Department, Ministry of Industry and Trade - during an online forum on Vietnam’s role in the global supply chain.
Increasingly important position in the production supply chain
According to the list of Apple’s global suppliers released in 2022, 25 of its supplier firms are establishing factories in several provinces in Vietnam, including familiar names like LG Display, Samsung Electronics, Advanced Semiconductor Engineering Technology, Murata Manufacturing and so on. Statistics from Reuters reported a noticeable increasing trend in the presence of Vietnam as a prime location for Apple’s suppliers, from 2.2% in 2019 to 3.7% in 2021. This indicates that Vietnam is growing as a bright spot for this giant’s strategy for supply chain diversification. DigiTimes estimated that 20% of iPads and Apple Watches, 5% of MacBooks and 65% of AirPods will be produced in Vietnam by 2025.
In June 2023, Compal Electronics - an important iPad and Apple Watch manufacturing contractor - invested in the Lien Ha thai Industrial Park project, specializing in manufacturing, processing and assembling electronic components and electrical products. The project attracted 260 million USD of registered investment capital, with a projected revenue of 1.2 billion USD in 2029 and 6.8 billion USD in 2037.
In the meantime, Foxconn - among the largest contractors of Apple - is implementing its plan to allocate iPad and MacBook production to Vietnam, creating more than 60,000 jobs for the Vietnamese labor market, with an announced investment of 270 million USD.
Increasing potential as a consumer market
Vietnam nowadays is not only an important manufacturer of MacBook and Airpods, but also a rising market that has received much attention from Apple. In May 2023, after the first online Apple store was opened in Vietnam, CEO Tim Cook tweeted on his personal account expressing his excitement about the news. The CEO also considered Vietnam one of the most developed markets for Apple products with double digit growth last July. Vietnamese Apple fans are now able to purchase Apple products directly from the official online store. Additionally, Vietnam is announced as the third ASEAN nation to support the use of Apple Pay.
Quartz News commented that Apple is betting on emerging markets in Asia with young populations and digital savvy and Vietnam is among the most potential choices. This newspaper also provided data on the estimated annual growth rate of Vietnam’s digital economy (at 40%) and the digital economic value of the country in 2022 (reaching 23 billion USD).
Final thoughts
The economy of Vietnam has witnessed significant growth in several sectors in the first half of 2023, and is expected to continue to progress even further in the remaining half, thanks to preferential policies for FDI attraction and new generation FTAs, and more. At the moment, Vietnam has risen as a global investment hub and an important manufacturer for many global supply chains, with open opportunities for businesses seeking to expand to new markets. Contact Viettonkin today if you are ready for your investment journey. Our team of experts will provide you with local intelligence and guide you through the process of investing into the dynamic market of Vietnam and other ASEAN countries.
Source: vietnamnet
