A sign of Foxconn, a world’s top electronics production contractor. Photo courtesy of the firm.
Among those having established a second supply chain in the Southeast Asian country is tech giant Foxconn, the world’s largest contract electronics manufacturer. Joining the heavyweight is a long list of other Taiwan-based producers like Compal, Quanta, Wistron, and Quanta.
Vietnam is already the largest production hub outside China for Taiwan-based electronics makers. Foxconn, Compal, and Wistron have started mass production and shipments. It is expected that once Quanta, another giant, begins mass production in the market, electronics production in Vietnam will further increase.
Original design manufacturers (ODMs) have been manufacturing electronics and smartphones in Vietnam for years. More than half of Samsung smartphones are made in the country, where national- and local-level administrations and workforce are familiar with the electronics assembly sector.
As for Foxconn, its Shenzhen-based subsidiary Foxconn Industrial Internet (FII) will “exclusively” supply Apple with made-in-Vietnam servers for training and testing artificial intelligence (AI) services, according to a report by Taiwan’s Economic Daily News, as the world’s most valuable company continues to diversify its manufacturing supply chain away from China.
The report, published on August 7, said that Foxconn accounted for about 43% of the global server market. FII has supplied its servers to Amazon Web Services, ChatGPT creator OpenAI and chip maker Nvidia, the report added.
In May, Nam Dinh province granted an investment certificate for Apple supplier Quanta to build a $120 million factory in the northern province, the giant’s first in Vietnam and its ninth worldwide. The plant, located in My Thuan Industrial Park, is set to manufacture 1.3 million laptop and desktop computers in 2024, 2.6 million in 2025, 3.6 million in 2026, four million in 2027, and 4.5 million in 2028.
Back in 2007, Compal said it was establishing a factory in Vietnam to diversify its supply chain. Foxconn came in the same year, gradually making Vietnam a globally popular location for making electronics.
Dell, an American tech giant like Apple, mainly outsources its manufacturing to Compal and Wistron, while Apple outsources to Foxconn and Quanta.
Quanta said it expected to complete the first-phase construction of the Vietnam plant next February 1, 2024, and the initial phase’s investment is about $22 million.
Compal’s operational production lines at its plant in Vinh Phuc province bordering Hanoi mainly produce networking and smart handheld devices. PC-related products also started small-scale production in 2022.
Compal announced in December 2022 the construction of its third factory at the Lien Ha Thai Industrial Park in Thai Binh province, also in the Greater Hanoi region, expected to complete in 2024. Products will include both PCs and non-PC products.
Wistron began construction for two factories in the Dong Van III Industrial Zone in November 2019. Construction was completed in 2020 and mass production began in 2021, with PCs and displays being the main products.
The two facilities almost reached full capacity earlier this year. Therefore, Wistron is in the process of establishing the third factory, with mass production expected to start in 2024, with notebooks as the main product.
Wistron’s board of directors approved a proposal to inject an additional $24.5 million into Vietnam for the new project, but they have not disclosed the new production location.
Like Wistron, Apple supplier Catcher Technology, a world-leading chassis maker, is in the process of building a production plant in Vietnam as other Taiwanese companies shift production to the country.
Taiwan-based Catcher is expected to begin work on this factory in this year’s fourth quarter. Neither the investment capital nor the location has been known.
Source: The Investor
