Foxconn accelerates investment in Vietnam
It is widely spread that Foxconn has submitted a proposal to Vietnamese government authorities about their plan to construct three new housings for workers in Bắc Giang, Bắc Ninh, and Vĩnh Phúc factories, which is a clear signal about their intentions to boost business activities in Vietnam.
The three projects in the Taiwan company’s proposal include Golden Park social housing in Quế Võ (Bắc Ninh province) with the total investment capital equivalent to 2,900 billion VND; Vân Trung social housing in Việt Yên (Bắc Giang province) with 3,400 billion VND and Phoenix Town worker and public service housing in Bình Xuyên (Vĩnh Phúc province) with 1,060 billion VND.
A representative from Foxconn revealed that the proposal was to “deal with the urgent demand for accommodation from our employees.” There are currently 50,000 people working in Foxconn’s factories all over Việt Nam.
However, the investment project’s goal may possibly more than just accomodating Vietnamese workers. Rather than that, Foxconn is predicted to soon expand its manufacturing activities in Việt Nam, especially in a specific context of the “global supply chain shift” initiative all over the world with “China + 1” strategy.
It seems that all the previous predictions will come into realization soon when Foxconn is in a process of proposing to invest in another 600 ha industrial zone in Bắc Giang province, simultaneously with an expansion project implemented in the Bình Xuyên 2 industrial zone, Vĩnh Phúc province.
Actually, Foxconn expressed a huge commitment to Việt Nam in 2007, when the management board of Foxconn declared to invest up to USD 5 billion in Việt Nam after certain small-scale projects in Bắc Ninh and Bắc Giang province. In February 2008, Foxconn was granted an investment certificate to take over a mobile phone production project with USD 200 million and a construction project of 485 ha Bình Xuyên II industrial zone with USD 25 million. However, the plan was a complete failure, and then, the mobile phone manufacturing project was revoked while Bình Xuyên II industrial zone’s scale was reduced to only 45.6 ha.
According to Foxconn’s internal research, the export turnover of this enterprise in Việt Nam reached USD 3 billion last year and is expected to climb up to USD 6 billion in 2020.
Will Apple soon participate in Vietnam’s market?
Unlike other giants such as Samsung or LG who have directly constructed their own factories, Apple has opted for a totally different pathway: Outsourcing. And Foxconn was selected as a primary assembler of Apple products such as iPhone and iPad.
Until now, there are no strong verifications that Việt Nam will be the next investment destination for Apple to manufacture and assemble its key products, but it is well noted that the spare parts for iPhone has long been “made in Vietnam”.
Moreover, a great number of component makers for Apple are planning to shift their production plants to Việt Nam. Luxshare – assembler of Apple’s wireless AirPods is constructing a factory in Bắc Giang province to enhance their productivity.
No matter whether Apple chooses Việt Nam to be an iPhone manufacturing hub or not, it is well noted that Apple, Foxconn and many other giants have set an eye on Vietnam as an attractive option to establish a completely new global supply chain.
Edited by: Dandelion