Samsung is a name recognized across the globe, famous for its smartphones, televisions, and semiconductors. These products have made Samsung Electronics a giant in the tech industry, boasting a market value of over $353 billion US dollars. To put this in perspective, Samsung’s market capitalization is larger than the entire GDP of some countries. This highlights the significant role Samsung plays in the global economy. However, for one country, Samsung’s presence is more crucial than in any other.
Vietnam, a developing nation, has opened its doors to foreign investors, and one of the biggest beneficiaries of this opportunity is Samsung. Samsung’s operations in Vietnam are massive, contributing greatly to the country’s economy. Through its locally incorporated company, Samsung Electronics Vietnam Thai Nguyen (SEVT), Samsung has invested over $20 billion US dollars in Vietnam. This investment has led to substantial economic benefits, including significant contributions to Vietnam’s export industry. Between 2018 and 2022, Samsung achieved over $306 billion US dollars in export turnover, with $65 billion in 2022 alone. This helped Vietnam’s total export turnover surpass $732 billion for the first time. Additionally, SEVT has created jobs for 150,000 people, with over 79,000 of these employees coming from Thai Nguyen. Samsung’s impact is further emphasized by its contribution of over $1 billion US dollars to the state budget.
These figures only scratch the surface of Samsung Vietnam’s importance to the Vietnamese economy. To truly grasp the impact, consider the significance of just one billion dollars—it represents the livelihoods of thousands of people. From an international trade perspective, Samsung’s contribution to Vietnam’s export turnover, particularly in 2022, is vital. Exports occur when a country sells goods or services abroad, and in this case, Samsung Vietnam is selling its products to countries like the United States. Payments for these exports accumulate in Vietnam’s foreign reserves, which are crucial for maintaining financial stability and economic independence. Growing reserves help the country cushion against economic shocks, stabilize the local currency (the dong), and maintain investor confidence.
Samsung’s impact on Vietnam’s economy is not just about numbers—it’s about history and future plans. Samsung’s journey in Vietnam began in early 2008, when Samsung Electronics announced a 50.5 billion Korean won investment to build a large-scale mobile handset plant in Northern Vietnam. This investment was made possible by Vietnam’s membership in the World Trade Organization (WTO) and ASEAN, which allowed products made in Vietnam to benefit from reduced tariffs in the ASEAN market. With low labor costs and a government keen on economic growth, Vietnam became an attractive destination for Samsung’s investment. The factory’s initial production capacity was over 30 million units annually, with plans to expand to over 100 million units. The investment was welcomed by local officials and businesses, as Samsung committed to sourcing 40% of its materials from Vietnamese suppliers and providing jobs for over 20,000 local workers.
Looking back, Samsung’s initial $46 million investment seems small compared to today’s figures. By 2009, Samsung Vietnam’s registered investment capital had grown to over $670 million, with the plant capable of producing 60 million cell phones annually, expected to reach over 100 million by 2012. The factory in Bac Ninh province sourced materials and components from 32 suppliers, including 15 local ones, and employed about 2,300 workers.
As Samsung invested in its Bac Ninh plant, it also expanded other operations in Vietnam, including the largest household appliance factory in Southeast Asia, located in Ho Chi Minh City (SEHC). Samsung Vietnam quickly became one of Samsung’s biggest manufacturing hubs, with only seven mobile phone factories worldwide. The plant’s first export shipment of 20,000 cell phones went to the United Arab Emirates, Thailand, and Singapore.
In 2010, Samsung Vietnam celebrated its $1 billion export turnover, with the Yen Phong plant now employing over 7,000 workers. Smartphones were being exported to over 53 countries and territories, and registered capital had grown to $916 million.
By 2012, Samsung Vietnam sought additional incentives from the Vietnamese government to expand further. Although already enjoying significant tax breaks and other benefits, Samsung argued that more support was needed to continue growing in Vietnam. The government responded by approving more incentives, enabling Samsung to announce a new $700 million investment in a mobile phone factory in Thai Nguyen.
By the end of 2012, Samsung Vietnam led all of Samsung Electronics’ overseas handset plants, producing over 150 million units annually, accounting for one-fourth of the company’s total output. Samsung officials projected that total investment in Vietnam would grow to over $2.2 billion by 2020.
In early 2013, Samsung Vietnam signed a 49-year lease for its second factory in Vietnam. The project was expected to generate 10,000 jobs in its first year, with plans to increase to over 30,000 workers in the following years. By 2013, Vietnam had firmly established itself as a smartphone manufacturing hub, with Samsung Electronics Vietnam alone planning to produce over 240 million smartphones, capturing 20% of the global market share.
By 2015, Samsung Vietnam had grown into a major company with two high-tech facilities in Bac Ninh and Thai Nguyen provinces, with a combined investment of $7.5 billion. These facilities exported $26.25 billion worth of products in 2014 and provided jobs for over 100,000 people. In 2014, Samsung also announced a $1.4 billion investment in the Samsung Consumer Electronics Ho Chi Minh City Complex.
By 2019, Samsung Electronics’ four subsidiaries in Vietnam generated $31.8 billion in revenue in the first half of the year alone. A significant investment in 2019 was a $220 million Research and Development center in Hanoi, aiming to be Southeast Asia’s most advanced R&D facility, housing 3,000 employees in a 16-floor building.
Today, Samsung Vietnam is not just any foreign investor—it is the largest and most important investor in Vietnam. From an initial investment of less than a billion dollars, Samsung’s total investment has grown to over $22.4 billion. The company has had a profound impact on the nation, and in 2024, Samsung is expected to invest an additional $1 billion annually to further expand its smartphone production in Vietnam, which now accounts for half of Samsung’s global smartphone output.