HANOI – Vietnam is positioning itself as a major manufacturing and technology hub in Southeast Asia, with foreign direct investment (FDI) flowing into the country at an unprecedented rate. In 2024, FDI into Vietnam reached nearly $31.4 billion, marking a 7.1% increase over the previous year. The country is set to attract even more global companies seeking to expand operations, particularly in high-value sectors such as electronics, semiconductors, and green technology.
Strong Investment Growth Across Key Provinces
The northern province of Bac Ninh led the way with over $5 billion in registered capital, accounting for 16% of the national total, more than three times higher than in 2023. Other key regions like Quang Ninh, Ho Chi Minh City, Hai Phong, Hanoi, and Binh Duong also saw significant FDI inflows, underscoring the nationwide interest in Vietnam as a prime investment destination.
Tech Giants Expand Operations
The high-tech sector has seen remarkable growth, with foreign companies making strategic moves into Vietnam. Notable investments include NVIDIA’s historic partnership with the government to establish a Research and Development (R&D) Centre and AI Data Centre in Vietnam, positioning the country as a future leader in AI research, behind only the U.S. and Taiwan. Other tech giants like Google and SpaceX are also ramping up their presence in the country, with Google officially setting up operations in Ho Chi Minh City, and SpaceX committing $1.5 billion in investment.
FDI Flow Shifting Towards High-Value Sectors
Vietnam’s FDI landscape is shifting towards more advanced industries. Electronics, semiconductors, and green technology are the leading sectors attracting investment, suggesting the country is moving beyond low-cost assembly operations. Companies like Foxconn, a key supplier to Apple, are investing heavily in high-tech manufacturing facilities in Bac Giang province, with other industry leaders like Meta expanding production of virtual reality equipment.
Caution Required Amid Geopolitical Risks
Despite the surge in FDI, experts caution that Vietnam must be vigilant in managing the risks associated with investment, particularly from China. While China is Vietnam’s third-largest investor, accounting for a significant portion of new projects, the ongoing U.S.-China trade tensions pose potential challenges. There is a risk that Chinese companies may use Vietnam as a base for final-stage manufacturing to circumvent tariffs. Experts urge the government to be cautious about environmental and safety standards and scrutinize smaller, lower-investment projects that might be used for origin evasion.
Towards Sustainable Growth and Strategic Investment
Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, emphasized the need for careful selection of FDI projects to ensure quality and sustainability. The country must prioritize investments that adhere to high environmental standards and avoid projects that risk harming the country’s reputation or being exploited for trade evasion.
Vietnam is poised to become a central player in the global technology and manufacturing sectors, attracting top-tier companies while continuing to build a transparent and sustainable investment environment. As the country enters 2025, it is set to capitalize on its growing reputation as a regional tech and manufacturing powerhouse. (zai)