26.11.2020, 14:21

Foxconn to inject US$270 million to expand production in Vietnam

As part of the world's largest financial publication, Nikkei Asia has recently published an article which unveils Foxconn’s plans to expand production in the nation with an investment of approximately US$270 million.

Foxconn will soon establish a new local company in Vietnam, where it already
makes TVs, telecom equipment and computer-related products. (Photo: AP)

According to the article, Foxconn, formally known as Hon Hai Precision Industry and based in Taiwan (China), began producing liquid crystal displays in the country last week with the aim of taking advantage of the recently-signed Regional Comprehensive Economic Partnership (RCEP) agreement, with hopes that they will bolster their local production capacity.

The piece notes that the RCEP was signed by 15 members on November 15 in an effort to reduce tariffs and allow seamless trade throughout Asia. Foxconn therefore plans to roll out full-scale production nationwide whilst enjoying the full benefits of the trade agreement’s framework.

Furthermore, Foxconn will soon establish a new local company in the country. Indeed, although further details have yet to be disclosed, the company will likely produce PC-related parts such as displays.

Although Taiwan (China) is not a part of the RCEP, most of Foxconn's production bases are in mainland China. Indeed, despite the northern neighbour being part of the trading bloc, the uncertainty surrounding their relations with the United States has led many companies, including Foxconn, to search for better production sites.

The article indicates that as a member of RCEP, the nation’s close geographically location to China makes it convenient for the purpose of parts procurement, whilst also having cheap labour costs.

Young Liu, chairman of Foxconn, has stated that, "The investment fever in Vietnam by major businesses is already quite considerable", whilst, "It is difficult to find land in North Vietnam" close to the border with China. On Wednesday, he noted that his company makes a wide range of products the nation, including TVs, telecom equipment, and computer-related products.

Foxconn is currently rushing to shift away from being overly dependent on Chinese production, with the primary goal of developing efforts outside of China in order to eventually make up over 30% of the firm’s overall production.

Rival companies such as Taiwanese electronics manufacturer Pegatron, along with contract manufacturer Wistron, have also decided to expand into the nation, with the latter planning to invest US$1 billion in an effort to build a manufacturing complex at the Nam Dinh Vu industrial park in the northern city of Hai Phong.

By: VOV/NIkkei Asia

Source: https://vov.vn/en/economy/foxconn-to-inject-us270-million-to-expand-production-in-vietnam-820216.vov