In the context of promoting the diversification of supply chains, semiconductor giants have bet on Vietnam and India. Next week, more than 50 U.S. companies, including Apple, plan to visit Vietnam to explore investment opportunities.
More than 50 U.S. business delegations will visit Vietnam next week with Apple on the list
On the 17th, Reuters reported that a list shows that more than 50 companies in the fields of defense, pharmaceuticals and science and technology, including SpaceX, Netflix and Boeing, will participate in a delegation organized by the U.S.-ASEAN Business Committee and plan to visit Vietnam next week to explore investment and sales opportunities in the country. It is worth noting that a number of US semiconductor companies, including Apple, are also among them.
99 of Vietnam's top 100 electronics companies are foreign-owned
As an exporter of electronics, Vietnam jumped from 47th in 2001 to 10th in 2020, with an export value equivalent to 1.8% of the global electronics export value, backed by a steady stream of input from semiconductor giants.
Samsung has reportedly invested more than $17.5 billion in Vietnam, employing more than 170,000 people in industrial parks in Bac Ninh and Thai Nguyen provinces. Samsung's mobile phones and electronic components account for 20% of Vietnam's total exports. Samsung is followed by Intel Corp. of the United States, LG of South Korea and even Panasonic and Canon of Japan, among which Intel is considering additional investment in Vietnam, and is expected to invest $1 billion to expand the size of the packaging and testing plant.
Currently, one-third of Vietnam's electronics companies are FDI enterprises, accounting for 99% of the industry's total exports. Among the top 100 electronics companies in Vietnam, 99 are foreign-owned. Samsung Electronics Vietnam is the largest in the industry.
Apple's active push to transfer production capacity to India has not been effective
Like Vietnam, India is a new hotspot for the shift of global semiconductor supply chains. According to US media reports, Apple has been committed to promoting "supply chain diversification" in recent years, and India is one of the supply chain transfer destinations. However, some of Apple's products made in India have a pass rate of only 50%.
Apple has been assembling low-end iPhones in India since 2017, and from September 2022, some Indian factories began supplying flagship models. However, India's flagship production is limited to assembling components such as panels, chips and chassis, and still relies heavily on Chinese suppliers.
Wall Street Journal reporter Zoe Thomas:
What are the obstacles to getting the advanced semiconductor industry off the ground?
Wall Street Journal South Asia correspondent Philip Vin:
The main obstacle is the complexity and difficulty of semiconductor manufacturing. Experts say that this is one of the most difficult things to make, because the type of labor must first be considered, and for this industry to start, it is necessary to have a trained and experienced workforce; There are also high costs, billions or even tens of billions of dollars to start a semiconductor chip factory project, and then several years to build a factory, and then several more years to recoup the cost.
Wall Street Journal reporter Zoe Thomas:
We know that India wants to develop the semiconductor industry at home, but what other advanced technology manufacturing industries are there in India?
Wall Street Journal South Asia correspondent Philip Vin:
Not much, actually. When it comes to the next level [of manufacturing], which is really high-tech manufacturing and advanced manufacturing, India has not really proven itself capable of this, and for a long time, India has been considered a difficult place to do business.
US media: It is difficult for Apple to leave China's efficient production system in the short term
Recently, the Wall Street Journal did an analysis explaining why it is not easy for Apple and its suppliers to move their supply chains to India and Vietnam.
In the past 20 years, Apple has mainly relied on Foxconn, the world's largest electronics manufacturer, for OEM manufacturing. Since 2010, Foxconn's Zhengzhou factory in China has taken over the production of Apple mobile phones, and its efficient production and supply system has suddenly stood out. It excels at assembling hundreds of parts needed to make iPhones from different suppliers and assembling them into finished products. It is worth mentioning that these parts and components, as well as the required metals, are smelted and manufactured locally in China, and do not need to be imported.
But assembly plants in India and Vietnam have less easy access to these components. According to Apple's latest supplier list, about 150 of the more than 180 companies it works with have operations in China. By comparison, only 26 suppliers that work with Apple have operations in Vietnam, compared to just 11 in India. For them, these parts need to be imported, but importing requires a lot of processes and takes longer.
Analysts say Apple is unlikely to leave China's efficient production system entirely in the short term.
New media of the Chinese Global Program Center of China Central Radio and Television Corporation
Source: CCTV4