South Korean electronics company Samsung Electronics has announced its intention to build a smartphone manufacturing plant in Vietnam, an investment that, as highlighted by a BBC report, will reach $3 billion.
Samsung already has a $2 billion factory in the country. Production at the plant began in March. In the past two years, several major smartphone and electronics companies, including LG, Panasonic, Intel and Microsoft have built factories in Vietnam.
The reason for the boom in electronics factories in the country is cheap labor and low taxes. Until now, the majority of large electronics companies produced their products in China.
"In a way, China is a victim of its own success. The more developed an economy it becomes, the more expensive it is to manufacture goods there," Daniel Gleeson, chief analyst at technology consultancy IHS Technology, told the BBC.
"Many manufacturers operate with very small profit margins. For this reason, they are trying to save as much money as possible, wherever they can. Moving from China to neighboring Vietnam seems attractive to many as a way to gain a comparative advantage," he adds.
