South Korean electronics companies, such as Samsung and LG, are leading the Vietnamese economy with large-scale investment and recruitment. In particular, Samsung Electronics and its affiliates hired more employees in Vietnam at 160,000, than in South Korea, emerging as a major company that actually leads the local economy.
According to the Korea International Trade Association (KITA) and industry sources on December 12, Vietnam’s overseas exports came to US$193.8 billion (211.53 trillion won) as of the end of November, up 21.1 percent from the same period last year. Out of the US$193.8 billion (211.53 trillion won), exports of cellphones and their parts amounted to US$41.3 billion (45.08 trillion won), while exports of electronics devices and computers and their parts totaled US$23.6 billion (25.76 trillion won). The figures increased 30.6 percent and 38.1 percent, respectively, pushing up the total exports.
Samsung Electronics, which produces home appliances and cellphones in Vietnam, exported US$44 billion (48.03 trillion won) over the same period, accounting for 22.7 percent of the total exports. The KITA said Samsung Electronics’ investments in Vietnam, including Ho Chi Minh City, Vietnam’s northern province of Bac Ninh and Thai Nguyen projects, stood at US$17.3 billion (18.88 trillion won), becoming the largest investing company in Vietnam.
In addition, Samsung Electronics continues to increase its recruitment in the country. Currently, Samsung’s electronics affiliates – Samsung Electronics, Samsung Electro-Mechanics and Samsung SDI – already employed 160,000 workers in Vietnam. The figure even went up to 180,000 including indirectly employed workers, except for those who work for its subcontractors.
It is higher than the total number of employees at the headquarters posted by Samsung Electronics, Samsung Electro-Mechanics and Samsung SDI at 120,000. Samsung Electronics recently carried out the open recruitment for college graduates in Vietnam in order to hire 2,200 new employees again. More than 20,000 local college students applied to the latest recruitment.
LG is also making an aggressive investment and hiring new recruits in Vietnam. LG Display, which has an organic light emitting diode (OLED) display panel module manufacturing plant in Hai Phong in the northern part of Vietnam. The company has been expanding its production lines with the investment of US$1.5 billion (1.64 trillion won) from last year. LG Display is planning to increase the number of its employees in Vietnam from the current 4,000 to 7,000.
LG Electronics, which operates television and cellphone manufacturing plants in Hung Yen and washing machine, vacuum and air conditioner manufacturing plants in Hai Phong in Vietnam, recently announced to make a US$1.5 billion (1.64 trillion won) investment in Vietnam by 2028 as well. About 2,000 people are working at LG Electronics’ plants in Vietnam. In addition, LG Chem and LG Innotek also have plants that manufacture electronics components, such as polarizing plates and camera modules, in the country.
LG’s electronics affiliates – LG Electronics, LG Display, LG Chem, LG Innotek – have 7,000 employees in Vietnam. The figure is relatively smaller than that of Samsung’s electronics affiliates.
Domestic electronics companies have been pushing into Vietnam due to multiple reasons, like production competitiveness, including labor costs, and the Vietnamese government’s supports. The Vietnamese government provides various benefits to foreign companies that invest over 330 billion won (US$302.34 million), including the exemption from corporation income taxes for four years. It also established the electronics component industry promotion law, offering up to 75 percent of technology transfer fees to local manufacturers, related education and training costs and tax relief and loan benefits. According to the Vietnam Chamber of Commerce and Industry (VCCI), the average yearly income of local employees is 3.84 million won (US$3,518).