Samsung to invest $3.3 billion, produce new chip parts in Vietnam

On 5 August 2022, Samsung President Roh Tae-moon, head of the company's MX business for mobile devices, in meeting with the Vietnamese Prime Minister Pham Minh Chinh to discuss that investment and various business initiatives.

The South Korean technology giant is planning trial production of its flip-chip ball grid array, a surface-mount packaging technology used for integrated circuits, at the Samsung Electro-Mechanics facility in Thai Nguyen, Vietnam. A new research and development center will be established in Hanoi by the end of this year or the beginning of 2023.

The most recent activities in Vietnam show Samsung's increased efforts to diversify its manufacturing supply chain, even while China continues to be concerned about South Korea possibly joining the United States-initiated Chip 4 Alliance

This alliance, which the US has envisioned to include South Korea, Japan, and Taiwan, threatens to cut China off from the globe's supply chains for semiconductors and to harm China's strategy for greater technological self-reliance.

South Korean President Yoon Suk-yeol promised to give top priority to national interests in determining Seoul's course of action in an effort to calm concerns that the nation will join that US-led semiconductor alliance. 

“Relevant government agencies will study and discuss the issue in a way to preserve national interests,” Yoon said. “People don’t have to worry about it too greatly.”
Yoon made the statement after Seoul reportedly informed Washington of its intention to take part in the preliminary meeting of the Chip 4 Alliance.

According to official statistics released on August 1, South Korea's trade with China registered a $570 million deficit, following shortfalls of more than $1 billion in May and $1.2 billion in June. Before May, South Korea's previous trade deficit with China in 1994

However, Samsung said that its Vietnam businesses' export turnover in the first half of this year was $34.3 billion, an increase of 18% over the same time in 2021, and represented about 50% of its $69 billion from the Southeast Asian nation in 2022.

Samsung invests $920 million in February of this year to increase its production capacity in Vietnam, and currently produces printed circuit boards, camera modules, and almost 50% of the world's smartphones.

Samsung gradually stopped producing products in China, and quit making personal computers in 2020 at its factory in Suzhou, a city in Jiangsu province's southernmost region. In Huizhou, a city in southern Guangdong province, Samsung closed its final mainland smartphone factory in 2019.

Various international businesses on the Chinese mainland have recently considered moving manufacturing to neighboring Asian nations in order to reduce supply chain risks, due to escalating geopolitical tensions and China's strict Covid-19 control measures.

Source: SCMP