Vietnam’s manufacturing sector has absorbed over $23 billion in FDI in the past year alone, cementing the country’s position as the primary beneficiary of the “China plus one” supply chain diversification thesis. Samsung’s Vietnamese operations now produce over 50% of the company’s global smartphone output. Apple’s supplier base in Vietnam has expanded to include Foxconn, Pegatron, and Luxshare — the same contract manufacturers that built Shenzhen’s electronics ecosystem.
The Manufacturing Migration
The structural drivers are well documented: labour costs approximately 40% below coastal China, a young workforce (median age 31), extensive bilateral trade agreements (CPTPP, EU-Vietnam FTA, RCEP), and geographic proximity to existing Asian supply chains. What is less widely understood is the sophistication of Vietnam’s industrial upgrading. The country has moved beyond garment assembly and basic electronics into semiconductor packaging (Intel’s $1.5 billion facility in Ho Chi Minh City), high-value electronics manufacturing, and automotive components.
The Hai Phong and Bac Ninh industrial corridors have emerged as the northern manufacturing hub, anchored by Samsung’s $20 billion+ cumulative investment. The southern corridor around Ho Chi Minh City and Binh Duong province serves the broader electronics and consumer goods supply chain. Between them, Vietnam’s manufacturing exports exceeded $250 billion in 2025.
Risks and Constraints
Vietnam’s manufacturing ascent is not without constraints. Power infrastructure remains the binding constraint — peak demand growth of 10-12% annually has outpaced generation capacity, leading to rolling blackouts in northern industrial zones. Logistics infrastructure, while improving (Long Thanh International Airport, Lach Huyen deep-water port), lags behind the pace of industrial development. And the skilled labour pipeline, while adequate for assembly operations, faces shortages in engineering and technical management roles that foreign manufacturers require.
Vietnam is no longer a low-cost alternative to China. It is an industrial economy in its own right — and the advisory opportunity lies in navigating the gap between its ambition and its infrastructure.