More advanced manufacturing from Taiwan (China) will be transferred to Vietnam in the next few decades as Vietnam is regarded as a top destination for Taiwanese investment, according to HSBC experts.

Investment capital from Taiwan (China) poured into Vietnam reached $2.2 billion in 2023, a 4-fold increase compared to the previous year, figures from the Ministry of Planning and Investment show.

Taiwan (China) is currently the fourth largest investor in Vietnam with nearly 3,200 projects and a total registered investment capital exceeding $39.5 billion.

Vietnam has attracted many Taiwanese giants in electronics such as Foxconn, Pegatron, Qisda, Compal, Quanta, and Wistron. The country recently received $250 million investment from Tripod Technology into southern Ba Ria-Vung Tau province.

Taiwan (China) has become the fifth largest trade partner of Vietnam with an annual two-way trade turnover of $25 billion.

Taiwan (China) is well known as a global leader in electronics and semiconductors, with more than 70% of the market share for high-end chips. Its companies make up more than 80% of the world’s PCs and 90% of its servers.

Meanwhile,  Vietnam owns a semiconductor industry which is anticipated to be valued between $20 - 30 billion by 2030, with the ambition to become the key player in the global semiconductor industry.

“The country has started to realize this aspiration by issuing policies focusing on high-quality FDI attraction and training enhancement. It boasts many advantages such as an abundance of young and skillful workers, an advantageous geographic location, a growing consumption market, competitive operational cost, and above all, a wide range of FTAs with diverse countries and territories,” Ms. Daphne Lee, Head of Commercial Banking at HSBC Taiwan, said.

Within ASEAN, Vietnam has become the second-biggest recipient of overseas investment from Taiwan, after Singapore, according to Ms. Lee.

With the pivotal shift occurring from labor-intensive industries to skill/knowledge-intensive sectors, the Vietnamese Government is offering preferential policies in high-tech industries, aiming to attract more quality investments, thereby promisingly bringing more benefits to foreign investors, including those from Taiwan, she said.

According to HSBC report, Vietnam has witnessed a strong recovery of the economy with a GDP growth of 6.9% in the second quarter of 2024 and 6.42% in the first half of the year.

With these achievements, the HSBC forecasted that Vietnam is likely to gain a growth of 6.5% for the whole year, becoming the fastest growing economy in ASEAN. These factors have made Vietnam more attractive to foreign investors, including Taiwanese businesses.