The Challenge of Industrializing Vietnam
The Southeast Asian country has a path to becoming an advanced manufacturing economy, but a lack of domestic industrial champions make this far from guaranteed.
In August 2022, Samsung announced it would begin manufacturing semiconductor parts in Vietnam in 2023.1 The manufacturing and electronics conglomerate is South Korea’s most valuable company by market capitalization and one of the world’s few major semiconductor manufacturers. It is also Vietnam’s single biggest private employer, with over 100,000 employees in the country.2 Samsung’s commitment to manufacturing in Vietnam has renewed optimism about Vietnam’s economic prospects. As early as 2005, Goldman Sachs had identified Vietnam as one of the “Next Eleven” emerging economies that would be among the biggest economies in the world in the 21st century. With a growing population of 100 million people and a GDP growth rate averaging around 6% since 2000, there are good reasons to be optimistic about Vietnam.3 But there are also good reasons to expect that Vietnam will forgo an independent industrial base and remain a supplier of cheap labor for foreign companies like Samsung.