Samsung to pour $2.5 billion into Vietnamese factories

The company reportedly wants to boost smartphone manufacturing capacity in the country.

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Sarah Tew/CNET

Samsung Display plans to increase manufacturing capacity in Vietnam by investing a further three trillion won ($2.51 billion) into the country.

Local news agency Yonhap reports that the tech giant's display arm currently produces between 40 and 50 percent of its smartphone ranges at two factories in Vietnam, located in the Bac Ninh province, northern Vietnam, and Thai Nguyen.

However, an increase in investment will help Samsung expand display-based product lines and cater for increased demand. At CES 2017, Samsung revealed a new range of quantum dot (QD) premium television displays -- the Q9, Q8, and Q7 -- which boast slimmer designs and enhanced picture quality.

In 2015, Samsung began constructing a new consumer electronics production facility in Ho Chi Mihn which manufactures devices including televisions, air conditioners, and washing machines. Operations began earlier this year and Samsung is reportedly planning to shift some production away from other facilities in countries such as Malaysia and South Korea to this new factory.

Yonhap says that in return for increasing Vietnamese investment from $1.4 billion to $2 billion by 2020, the local Ho Chi Minh government will reward the electronics giant with additional tax breaks.

Citing unnamed sources, the publication says that Samsung and Vietnamese officials are currently in talks concerning the fresh investment.

See also: Samsung to invest $150m into emerging tech startups globally

While Samsung would not comment on the report, a Reuters source said the display maker is concerning additional investment in Vietnam, but declined to comment further.

Despite the Galaxy Note 7 disaster which ended up in a safety recall of the product as a fire hazard, Samsung still expects its highest profit in three years of 9.2 trillion won ($7.7 billion) for the fourth quarter of 2016 due to the rising success of its chip business.

Samsung is not the only manufacturer investing in Vietnam. South Korea's Seoul Semiconductor Co. has won a license to build a new $300 million semiconductor facility in the north of the country, while LED manufacturer Lumens Co., based in Seoul, hopes to begin manufacturing operations in the south later this year.

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