FDI goes hi-tech

22:05' 10/06/2007 (GMT+7)

At a plant of Nidec VietNamNet Bridge – A race to invest in Vietnam between hi-tech groups is taking place with capital up to billions of US dollars. Japanese-American technologies come to Vietnam Japanese investors are considered to have come to Vietnam the earliest and have the highest number of hi-tech projects in the country. Many reputed groups of Japan such as Sanyo, Matsushita, Sony, Fujitsu, Toshiba, Panasonic and Nidec have been developing plans in Vietnam for a long time and they are now continuing to pour in more capital to expand their facilities. The most outstanding example is the Canon group. After investing US$100 million in a printer plant in the Hanoi-based Thang Long Industrial Zone, Canon has spent hundreds of millions of US dollars on its new factories in the northern province of Bac Ninh, turning Vietnam into the world’s largest laser printer manufacturing centre. Canon’s $300 million laser printer factory in Vietnam can produce 700,000 units a month, equivalent to 80% of the total laser printers that Canon makes annually and meeting around 30% of the export market. Canon hopes to earn turnover of US$1 billion this year. Nidec came to Vietnam earlier than Canon and it has recently put into operation two new factories in the HCM City Hi-tech Park after investing nearly $100 million in its plants in the HCM City-based Tan Thuan Export Processing Zone over the past ten years. According to Nagamori, Nidec Chairman, the two new plants which manufacture electronic components and worth $50 million are part of Nidec’s $1 billion investment plan in the HCM City Hi-tech Park to 2010. This Japanese investor plans to build ten plants on 33ha of land in the park to turn it into its second largest base in Asia, after its one in China. Following Japanese investors in the hi-tech field are American businesses. Intel’s construction of a chipset plant with $1 billion of capital in HCM City has partly solidified the position of Vietnam as the new destination for hi-tech investors. The presence of Intel’s plant in Vietnam has been considered positive confirmation of Vietnam’s investment environment so only two months after Intel kicked off the construction of its plant, the US’ leading electronic group – Jabil – decided to invest in the HCM City Hi-tech Park with $100 million of capital. Many investors from Taiwan now consider Vietnam a safe destination where there are low labour costs, and they plan to pour billions of US dollars in the country. Taiwan’s Foxconn, a giant firm producing electronic products such as Ipod music players, Nokia mobile phones, laptops, Sony cameras plans to invest $5 billion in projects in the northern provinces of Bac Ninh and Bac Giang. Those projects will create jobs for around 50,000 workers and create export revenue of around $3.5 billion each year. This investment plan of Foxconn aims to disperse risks because it has invested a huge amount of money in China. Meanwhile, another group of Taiwan, TECO, has joined hands with SaigonTel to invest $1 billion to build a software centre in the Thu Thiem new residential area. This centre will be built after the model of the NanKang software centre in Taipei and will attract around 100 IT firms from the NanKang centre. Hi-tech investors come to Vietnam for many reasons: open policies in drawing investment, Vietnam’s accession to the World Trade Organisation, low labour costs and production costs. Developing R&D centres Foreign investors are not only investing in production but also in research and development (R&D) centres in Vietnam. After building two factories producing hi-tech electronic products in Hanoi, Matsushita Electric, the owner of the Panasonic brand name, has announced it will invest in a Panasonic R&D Centre in Vietnam. This will be the third R&D Centre of this group in Southeast Asia to design system chipsets, software for mobile phones and flat-screen television sets. The US’ Jabil group is also investing in a centre providing design solutions for global customers at low costs in Vietnam. Renesas Technology, Japan’s leading and the world’s third-largest semi-conductor and chipset producer, is about to put into operation an R&D centre in HCM City. Vietnam now has a big opportunity to attract foreign investment in the hi-tech industry and according to investment promoters, the country should quickly develop infrastructure and train human resources to serve investors. (Source: VNN)