Hanoi (VNA)⛎ - More advanced manufacturing from Taiwan (China) will migrate to Vietnam in the following decades, according to Daphne Lee, head of Commercial Banking, HSBC Taiwan, and Ahmed Yeganeh, head of Wholesale Banking at HSBC Vietnam.

Vietnam is emerging as a prime destination for attracting Taiwanese businesses. In 2023, Taiwan quadrupled its investment in Vietnam compared with 2022, reaching a staggering 2.2 billion USD. To date, Taiwan is the fourth largest investor of Vietnam, boasting nearly 3,200 projects and a total registered capital of 39.5 billion USD. Additionally, Taiwan has become Vietnam’s fifth largest trading partner with current annual bilateral trade turnover reaching 25 billion USD, according to the Vietnamese Ministry of Planning and Investment. In first six months of 2024, there were 39 new Taiwanese-invested projects in electronics, garments and textiles and electrical equipment, with a total registered investment capital of 513.37 million USD, equivalent to 49% of Taiwan’s total FDI in the period. One of Taiwan’s most popular exports to ASEAN is bubble milk tea. The island’s signature beverage has become a staple of shopping malls and takeaway stands across ASEAN, with total annual sales estimated at 3.7 billion USD. Vietnam with its 100-million population contributed 362 million USD to this number, only behind Indonesia and Thailand.

The HSBC experts said it is clear that Taiwan’s strengths in the technologies make it integral to the supply chains of the future. The opportunity is reciprocal, with Taiwanese companies strengthening their trade links in ASEAN, while international tech firms increasingly see Taiwan as a compelling investment proposition to bring innovations to scale. Taiwan is well known as a global leader in electronics and semiconductors, with more than 70% of the market share for high-end chips. Companies from Taiwan make more than 80% of the world’s PCs and 90% of its servers. Meanwhile, Vietnam owns the semiconductor industry which is anticipated to be valued at 20-30 billion USD by 2030, with the ambition to become a key player in the global semiconductor industry. The country started to realise that aspiration by issuing policies focusing on high-quality FDI attraction and training enhancement. Vietnam is also home to an abundant young, skilled labour force, strategic geography, growing consumption market, competitive operational costs, and above all, a wide range of FTAs with diverse countries and territories.

In ASEAN, Vietnam has become the second-biggest recipient of overseas investment from Taiwan, after Singapore. The Binh Duong branch of the Council of Taiwanese Chambers of Commerce in Vietnam has more than 600 members, the most of any chamber of commerce for companies from Taiwan anywhere in the world. In the opposite direction, more than 250,000 Vietnamese live and work in Taiwan. Recently, companies from Taiwan have been stepping up their investments in more advanced electronics. Investments like these help Vietnam upskill its workforce, rise up the manufacturing value chain, and attract other suppliers, affirmed the HSBC experts. The 100-million-population country has attracted Taiwanese investors thanks to its strong fundamentals and cultural similarity, especially in high-tech areas. Vietnam is now familiar with Taiwanese giants in electronics such as Foxconn, Pegatron, Qisda, Compal, Quanta, and Wistron. The country has recently received 250 million USD from Tripod Technology in Ba Ria-Vung Tau province. With the pivotal shift from labor-intensive industries to skill/knowledge-intensive sectors, Vietnam’s government is offering preferential policies in high-tech industries, aiming to attract more quality investments, promising to bring more benefits to foreign investors including Taiwan./.