Samsung Display is going to build a facility that produces display modules for mobile devices in Vietnam, with an investment of 1 trillion won. As a result, Samsung will be able to achieve a vertical integration system for production of cell phones in the Southeast Asian country.
According to industry sources on July 3, authorities in Bắc Ninh province, Vietnam recently approved an investment proposal submitted by Samsung Display to construct a facility in Yên Phong. Hence, Samsung Display will be able to build a large-scale plat that manufactures display modules for cell phones in the remaining 46.28 hectares of space of Samsung Electronics' first cell phone facility.
The company is planning to start the construction in July and to commence full operations as early as the first quarter of next year. Display modules in cell phones produced in Bắc Ninh province are going to be supplied to Samsung Electronics' first facility in Bắc Ninh and a second one in Thái Nguyên that produce mobile devices.
Samsung Electro-Mechanics, which already started to make core mechanical components of cell phones, has been building a plant in Thái Nguyên with an investment of US$1.2 billion since last year. Once Samsung Display's facility is fully operational, Samsung can reduce costs and increase efficiency, because all of its facilities that produce cell phones are located in the same country.
Meanwhile, the Vietnamese government reportedly made a decision that it will give Samsung Display tax benefits applicable to high-tech companies. If recognized as a high-tech firm, the company is exempted from paying business taxes for first four years, and gets tax cuts by 50 percent for another nine years.