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Samsung smartphones: what does Vietnam actually make?

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Vietnam makes boxes and wires for Samsung smartphones, while the five key components of products are made by foreign-invested enterprises.

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Samsung says it will take Vietnamese companies 10 years to become more involved in the company’s production chain.

Government agencies and experts all agree that the presence of the foreign conglomerates in Vietnam like Samsung has strengthened the economy.

As for the high 7.46 percent GDP growth rate in the third quarter, deputy general director of GSO (General Statistics Office) Nguyen Bich Lam said it was the Galaxy Note 8s and Samsung’s expansion in Vietnam which contributed to the high growth rate.

In a recent ’10 nam WTO viet tiep con duong hoi nhap’ (Vietnam’s 10-year Wolrd Trade Organization membership period) TV program, reporters of Vietnam Television took a tour to Samsung’s factories in Vietnam.

They found that Vietnamese only make phone boxes, wires and 20 percent of the robot hands, which do simple work on Samsung’s production line. 

Each box is valued at $2, and if noting that the whole phone product is valued at $1,000, the box just accounts for 0.2 percent of the total value. 

Only two Vietnamese enterprises have had opportunities to provide boxes to Samsung and they have to compete with six foreign invested suppliers.

To create such small value and obtain opportunities to provide boxes, enterprises have to spend VND1.4 trillion to install a box production line specifically for Samsung. Meanwhile, Samsung may reject them as box suppliers at any time.

Pham Cao Vinh, president of Goldsun, a printing and packaging company, said he is under pressure making products for Samsung, even though the product is a small part of the phone.

“If we cannot join Samsung’s tier-one vendor, we will be excluded out of the game,” he said.

Reporters have found that Autotech Vietnam makes the robot hands on Samsung’s production line. However, the company’s director Pham Thi Huong admitted only 20 percent of the hands are made in Vietnam, while 80 percent of the components are imports. 

The five key units in Samsung’s phone product, CPU, chip, screen, camera and battery, are imported and made by foreign companies which are Samsung’s subsidiaries.

Twenty-seven Vietnamese companies are tier-one vendors to Samsung.

Shim Won Hwan, president of Samsung Viet Nam Complex, said at a recent event that
Samsung is expected to increase the number of Vietnamese tier-one vendors from 27 to 29 by the end of 2017 and to 50 by 2020.

 

 

Source: VietNamNet

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