Ground was broken in Thai Nguyen Province for Samsung's second plant in Vietnam March 25
South Korean companies in supporting industries are expected to make a beeline for Vietnam after electronic giants Samsung and LG announced plans for massive investments in the country.
Kyung Shik Sohn, chairman of the Korea Chamber of Commerce and Industry (KCCI), expects a wave of investments by Korean firms in supporting industries for the technology industry.
In March Samsung Electronics Vietnam started building a US$2-billion plant, the first of two it plans in a $3.2-billion high-technology complex in Thai Nguyen Province's Yen Binh Industrial Zone.
The plant, expected to go on stream later this year, will have an annual capacity of 100 million mobile phones and other electronic devices.
Samsung already has a $1.5-billion plant in Bac Ninh Province.
In March LG announced it would build a $300-million plant in Hai Phong city's Trang Due Industrial Zone.
Doosun Vietnam is one of the first Korean companies that have jumped on the bandwagon.
Recently it got the license for a $14-million factory in Thai Nguyen Province to print on packaging for Samsung products when it opens in October.
Besides new arrivals, insiders also expect existing Korean businesses in Vietnam to expand.
Haesung Vina, a phone camera maker for Samsung, has tripled its investment to $36 million to increase annual capacity to 25 million units.
Kyung also said tax breaks for advanced industries and their supporting units are attracting them to Vietnam.
Most South Korean companies used to invest in the textile and footwear sectors to take advantage of tax breaks, but Vietnam now offers incentives only for the tech sector, he said.
A Ministry of Industry and Trade official, who requested anonymity, was quoted by news website VnExpress as saying hi-tech businesses promise Vietnam "large" investments.
Deputy Minister of Science and Technology Tran Viet Thanh said licensing in the technology sector would be streamlined.
There are around 1,500 Korean companies with a presence in Vietnam.
In the first three months of this year Korea invested $157 million in Vietnam, the third largest among all countries and territories.
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