VIETNAM – Several large electronics manufacturers will reportedly withdraw from China and move into Vietnam.

In August, the Taiwanese Printing Circuit Manufacturers Association will begin building a 740-acre complex in Hanoi, with room to accommodate 10 to 20 manufacturers. HannStar Board, Gold Circuit Electronics (GCE), Unimicron Technology, Tripod Technology and Compeq Manufacturing have recently sent representatives to Vietnam to survey the area.

In early March, the world’s fourth-largest LCD display producer, Taiwan’s Chi Mei Optoelectronics, announced plans to build a factory in Vietnam. According to reports, Chi Mei struck an agreement with laptop producer Wistron Corporation in its investment in Vietnam, citing lower labor costs than China. Compal Electronics, Acer and Foxconn already have manufacturing facilities in Vietnam.

In addition to these electronics manufacturing companies, Japan’s Olympus will close a factory in China and open one in Vietnam. This $44.35 million project is expected to begin in late 2008.

According to Vietnam Electronics Industry Association reports, the Netherlands’ Philips is also considering a move from China to Vietnam. Philips representatives have met with association members and part suppliers Mitsustar, CMS and others. Philips currently places orders worth $8 billion in China.

Reports cite that Vietnam is increasingly attractive to foreign investors because of China's newly-enacted and stricter environmental laws, increased minimum salaries, a new labor contract law enacted in early January, and the revaluation of the yuan, all of which create difficulties for manufacturers and hinder their expansion in China. As a result, recent years have seen and increased average growth rate for electronics and IT industries in Vietnam of 25% to 40% a year.

Truong Gia Binh, FPT General Director, said the move of electronics manufacturing to Vietnam is also due to Vietnam’s more convenient geographic location, stable politics, economic growth, lower labor costs and greater potential for high-tech development.