With its strategic location, modern industrial park infrastructure, open investment policies, and focus on high-tech electronics, Vinh Phuc has become a hub for major electronics firms, boosting job creation and socioeconomic growth. However, the province faces challenges requiring sustainable development strategies.
The signing ceremony of a cooperation deal between CNCTech and Signetics to develop a US$100-million semiconductor facility
Attractive destination for giant electronics firms
The province is near major economic centers and has a developed transportation system, enabling it to quickly connect with domestic and foreign markets. Synchronous modern transportation infrastructure creates competitive advantages in investment attraction, especially for the electronic parts manufacturing industry. Besides, Vinh Phuc now has 17 industrial parks with a total area of 3,142.96 ha, including nine in operation (Kim Hoa, Khai Quang, Binh Xuyen, Ba Thien, Binh Xuyen II - Phase 1, Ba Thien II, Tam Duong II - Section A, Thai Hoa - Lien Son - Lien Hoa - Section II - Phase 1, and Thang Long Vinh Phuc), and three under construction. Basically, operational industrial parks are filled with secondary investment projects.
Given its locational advantages plus well-invested industrial parks, Vinh Phuc province has become a leading light in attracting investment capital into electronic components manufacturing. Currently, over 200 electronic components manufacturers are operating in the province, with many giant foreign direct investment (FDI) firms like Partron Vina Co., Ltd (investing US$270 million), Heasung Vina Co., Ltd (US$165 million) that manufactures electronic components, mobile phones and camera products, Power Logics Vina Co., Ltd (US$100 million), and BH Flex Vina Co., Ltd (US$61 million).
Most of the electronic companies in Vinh Phuc province are foreign invested from Japan, South Korea, Taiwan (China) and other markets. They use modern automated technological lines and equipment. Many are deeply involved in global supply chains and can maintain and meet large orders. This not only affirms Vinh Phuc's position on the electronics manufacturing map of Vietnam but also enhances its competitiveness in the Southeast Asian region.
Although global economic slowdown and political turmoil caused supply chain disruptions at times and shrinking orders, electronics businesses in Vinh Phuc still actively slashed costs and improved productivity and product quality. Besides, they carried out strong digital transformation in all fields and increased the demand for electronic products such as tablets, smartphones, laptops and smart watches, thus electronic components manufacturers in Vinh Phuc province such as Compal, BG Flex, DKT Vina, Interflex Vina and Arcadyan still had stable orders from world-leading technology corporations such as Apple, Dell, Samsung and Google. Some big manufacturers of electronic components in the province are expected to achieve high revenue growth as compared to 2023. For example, Compal Vietnam Co., Ltd was expected to increase revenue by 27%, BHFLex Vina Co., Ltd by 49%, and Arcadyan Technology Vietnam Co., Ltd by 47%. In 2024, the province's electronics components manufacturing was forecast to expand by 14 - 16% year on year.
Recently, Signetics Joint Stock Company (South Korea) officially signed a cooperation agreement with CNCTech Group (Vietnam) on the implementation of a US$100-million semiconductor manufacturing factory in Vinh Phuc on over 5 ha in Ba Thien Industrial Park - Section I. After completing legal procedures on investment and construction, the company will start construction on the factory and start production by the end of 2024. The project was expected to become a strong magnet to strongly draw South Korean investors to Vinh Phuc province.
Jahwa Vina Co., Ltd, a wholly Korean-owned enterprise, specializes in the production of high-quality electronic components
Sustainable development strategy
In addition to the above advantages, the electronic components manufacturing industry in Vinh Phuc is facing enormous challenges such as dependence on imported components and a low localization ratio. This dependence makes the supply chain vulnerable to disruptions when the global economy or politics are volatile. When input prices rise or when the supply is volatile, businesses will find it hard to maintain production, leading to the risk of losing orders from international partners. Moreover, despite having an abundant labor source, the industry still faces a shortage of high-quality human resources, especially in engineering and technology. This shortage not only weakens productivity but also hinders innovation and high-tech product development.
To boost the sustainable development of the electronic parts manufacturing industry in Vinh Phuc, the province proposed some important strategies like increasing localization and developing supporting industries. The provincial government actively called for domestic and international corporate investment for supporting industries, aiming to increase the localization ratio. Developing domestic suppliers not only reduces dependence on imports but also improves the supply chain, stability and competitiveness of electronic components manufacturers.
Investing in high-quality human resource training: Vinh Phuc cooperates with educational and vocational schools to address the shortage of highly skilled human resources. Training programs focus on information technology skills, automation and production management according to international standards, helping improve the quality of human resources in the electronics industry.
Developing high-tech parks: Vinh Phuc is developing high-tech parks to attract projects with high added values and advanced technologies. These projects not only improve production capacity but also enhance the province’s competitiveness in the international market. The province is applying Technology 4.0 to production, encouraging businesses to apply Technology 4.0 to optimize production processes and enhance productivity and product quality. Technology transfer and digital solutions will help businesses compete better and quickly meet market demand.
Furthermore, investment support and administrative procedure reform: The province will continue to implement priority policies to woo electronics, telecommunications and supporting companies. At the same time, administrative procedures will be reformed in a public and transparent manner to facilitate corporate investment. Vinh Phuc will also focus on developing industrial park infrastructure to create available land for investment projects and form an effective and attractive investment environment.
By Thanh Loan, Vietnam Business Forum
Vietnamese
