The effect Samsung has on the economy of Vietnam

Huge boost to exports

2017 was a year of great significance for both the Vietnamese economy and Samsung Vietnam. Vietnam's export turnover for the first time in history reached more than 214 billion USD, and Samsung Vietnam's export turnover also achieved a breakthrough with more than 54 billion USD for the first time ever.  

Samsung Vietnam contributes more than 25% to the total export turnover of Vietnam. This miraculous figure is 150 times higher than Samsung Vietnam's total export turnover in 2009 ($350 million), when SEV began production.

As of June 2018, Samsung has reached the milestone of 1 billion high-tech smart products manufactured in Vietnam. The 1 billion products figure include smartphones, tablets, smart watches, and other basic mobile phone products. 

Among those, Samsung Bac Ninh factory produced more than 625 million products, and Samsung Thai Nguyen produced more than 431 million products. Vietnam is currently the second largest smartphone export in the world after China, and Samsung plays a significant role in this acheivement. 

Job creation and social development

Along with great economic contributions, Samsung Vietnam has made a positive impact on the social environment. The enterprise is employing more than 160,000 employees, all of whom enjoy a stable income and special benefits. 

Samsung has come a long way since 2008, when SEV was first established. At the time, there were only 200 working employees, which grew to 2000 employees in 2009. With the growth of investment and export, the number of staff at Samsung Vietnam has been steadily increasing ever since. 

Throughout its history in Vietnam, Samsung has organized many volunteer programs. The most notable of them is the Smart Library program. Up to now, Smart Library has helped to renovate more than 50 school libraries, donate 200,000 book titles, 300 computers, tablets, TVs, DVD players...to serve 50,000 high school students across Vietnam. 

The program has created a knowledge exchange space named “S.hub” to be implemented at the General Science Library of Ho Chi Minh City, as well as the National Library of Vietnam. Another example is the "Contributing to build a bright day" program to repair the old schools, give gifts to more than 1,000 students and sponsor a "mobile library" to help them read books for free. 

Major infrastructure contribution

In terms of infrastructure, Samsung has built four manufacturing centers in Vietnam and a newly developed R&D center. Other entities under Samsung group have also invested heavily in their manufacturing facilities in the country. These manufacturing centers contain housing, schools, medical centers, gyms…to serve their employees. 

Samsung has also invested in infrastructure such as roads, electricity and water networks…in the areas near their manufacturing centers. These infrastructures not only serve Samsung’s facilities, but they have a positive impact on the host city and its citizens as well. 

Opportunities and challenges for domestic suppliers 

The operation of large electronics corporations like Samsung entails a huge ecosystem to support its production and business activities. Other foreign vendors are flocking to Vietnam to open factories to shorten the supply chain gap, as well as taking advantage of cheap human resources, potential markets and incentives that the Government offers.

The number of level 1 vendors located in Vietnam has increased over the years, increasing 10 times over the years.

As of 2019, Samsung Vietnam has about 210 suppliers (both international and domestic). These suppliers provide plastic components for phone cases, charging cases, molds, packaging, meals, security, hygiene... This number is continuing to rise as the company looks for new partners in the field of equipment and electronic components.

This is a great opportunity for Vietnamese enterprises but is also a big challenge. It is vital that domestic suppliers be competitive in price, technology and quality. If  Vietnamese businesses can offer competitive products compared to existing businesses in Samsung’s supply chain, there is no reason why Samsung would not choose domestic suppliers. This is because with the same product (assuming with the same quality), domestically suppliers will be faster, have cheaper prices, and more favorable shipping conditions.