Samsung rejects rumor of shifting smartphone production chain out of Vietnam
Employees work at a Samsung facility in Vietnam. Photo by T. Trang/Tuoi Tre.
Choi affirmed that over the past 10 years of its operation in the northern province, Samsung has received much support and many incentives from the provincial government, departments, and locals.
Therefore, the South Korean tech firm has constantly expanded its reach.
Samsung Electronics Vietnam-Thai Nguyen got off the ground in March 2013, with total capital of US$2 billion.
The investment capital jumped to $3 billion a year later.
Continuing the trend, Samsung has relentlessly revised up its investment capital and expand production.
For example, Samsung has poured an additional $1.18 million into Samsung Electro-Mechanics Vietnam. Samsung’s total investment in Thai Nguyen has reached over $7.5 billion.
The Samsung executive pledged to continue maintaining its business operations and ramping up production in Vietnam.
The firm considers manufacturing transistor grids, trialing these products in May, and starting mass production in November this year.
In 2023, Samsung Thai Nguyen aims at five percent growth.
All rumors about Samsung’s investments or a shift to India are incorrect, stressed Choi.
“The majority of products made in India serve the domestic market, while only a minority are exported to African countries," he elaborated.
"Meanwhile, Samsung’s products manufactured in Vietnam are shipped to 128 nations worldwide.
"As a result, the output of the Vietnam-based Samsung factory is not affected by that of the plant in India.”
Speaking of the global minimum tax, Choi said that to avoid reducing Samsung Vietnam’s competitiveness, the group proposed the Vietnamese government promptly consider and adopt appropriate solutions after applying the tax.
The global minimum tax is a tariff levied on major enterprises and multinational companies which report huge revenue, but invest in nations with low tax rates to avoid taxes, posing a threat to fair competition.
Vietnamese Prime Minister Pham Minh Chinh told an annual Vietnam Business Forum held in Hanoi on Sunday that the government was learning from other nations to issue suitable policies on the global minimum tax this year in a bid to improve the investment climate and give more chances to foreign companies to do business in Vietnam.
Keeping export revenue stable
A source told Tuoi Tre (Youth) newspaper that the rumor of Samsung shifting its smartphone production chain to India is baseless.
Over the past few years, Samsung has maintained its export revenue in Vietnam thanks to its production stability.
The firm posted $65.5 billion in export revenue in 2021 and $65 billion last year, down $500 million due to the global squeeze and surging inflation after the COVID-19 pandemic.
Though Samsung produces electronics worldwide, Vietnam accounts for a large proportion of its smartphones, at about 50-60 percent of the firm’s total smartphone output.
It is not simple to shift a major production chain to another country if there are no detailed plans as production based on certain production and supply chains in many nations needs allocating and depends on the number of orders, according to the source.
The Thai Nguyen leaders highly valued Samsung’s contribution to the province’s industry development.
The firm’s investment and expansion have made a positive impact on the province’s labor restructuring, index of industrial production, and exports.
Source: Tuoi Tre News