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I wonder why more producers haven't made this move? If Vietnam is there as far as infrastructure goes and they have the skilled/unskilled labor why is this not

I wonder why more producers haven't made this move? If Vietnam is there as far as infrastructure goes and they have the skilled/unskilled labor why is this not a more popular move. Also when we say "make" I assume we mean "assembles". Somewhat anecdotally I recently purchased a laptop and tried to find one that wasn't made in China and it was nigh on impossible.

avocado4 7y ago
It takes time to move supply chains.
- hardwaresofton 7y ago
  Right but Samsung didn't start yesterday either -- I'm surprised news of Samsung starting to move their production (whenever that started) didn't spur other companies to move.
- fauigerzigerk 7y ago
  And crucially, it takes more time than imposing new tariffs.
latchkey 7y ago
I'm a tech expat living in Vietnam (from Bay Area) for the last 4 years. This is a really loaded question. You have to look into the politics of the VN govt, especially related to the fact that it is on the northern end of VN, closer to Hanoi... which has different politics than in the south. I've been to Hai Phong, which is the city in the north near the China border where most of this commerce happens. It is fascinating to see how big the houses are there. If you drive along the road to the airport it is literally filled with old men riding their nice shiny new bicycles and exercising by the side of the road. The tariffs definitely have people looking into Vietnam a lot more. I've driven (motorbike) the dirt backroads near the Chinese border where there is nothing but trees and mountains. There are literally trucks brining goods into and out of Vietnam (illegally) on hastily constructed dirt roads. You can see it in google maps even. I've seen how people have strung cables over rivers between China and Vietnam to ferry goods back and forth. So yea... it is happening, it just isn't hitting the news much. It is also happening in Cambodia and Laos. Look into the roads China is building and how Sihanouk is a literal Chinese eco disaster. Fascinating times...
- AFascistWorld 7y ago
  You can pay something like 50 RMB for them to motorbike you through the jungles into Cambodia or Loas (illegally) without any questions asked. There are also illegal but protected casinos near the Vietnam-China border entry, that only allow in Chinese nationals.
  - latchkey 7y ago
    I did it myself. Even stood on the literal border of Vietnam and China. ;-) That is China in the distance and VN is building a wall of some sort. The road that you see is filled with trucks carrying stuff. Last picture is one of the dirt border backroads I was driving on... pretty epic trip. I also drove into Laos near the north side and all through it as well. The amount of Chinese influence in Laos is overwhelming. https://imgur.com/a/WGWv9kr https://imgur.com/a/WGWv9kr
- tootie 7y ago
  I don't doubt it, but there must be a very limited throughput. They can't be shipping even 1% of China's output over dirt roads.
- selimthegrim 7y ago
  Sihanoukville you mean
- dageshi 7y ago
  I visited Sihanoukville 11 years ago and 2 years ago. It's like a bomb of chinese money went off, that place is going to be the next las vegas/macau.
deleted 7y ago
[deleted]
duxup 7y ago
I think Samsung and their partners have the funds to make a full shift far more capably compared to companies who operate in China, or their manufacturer is in China... and don't have the resources / have their own concerns about leaving China. Also who knows how long Samsung has been working on such things.
tanilama 7y ago
Because most major manufacturers are mainly Chinese now(Huawei/Xiaomi/Oppo), and China is the NO1 market, why leave China? Samsung had been irrelevant in China for some years now, like below 1% market share. It just can't compete US is by far the only market that Chinese phones haven't dominated, but that is for a reason. Buying an Android in US there has surprising limited choices, Samsung/OnePlus/Pixel in that Order, and that is it. It is Duoploy either Samsung or iPhone, and others don't play.
- creddit 7y ago
  Right. The US only. Well, also Japan. Also, Korea. I guess also much of Europe too. Or Canada. But, yeah other than that. Which I guess is really just India and China. So I guess the reason is median/mean income??
  - tanilama 7y ago
    https://www.counterpointresearch.com/global-smartphone-share/ https://www.counterpointresearch.com/global-smartphone-share... Adding Huawei+Xiaomi+Oppo+Vivo alone counts 45% of the world smart share already, by units, and the others consisting ZTE/Lenovo and other Chinese brands as well. Safe to say the Chinese phones are already 50% of all phones shipped. Yes, it is pretty dominating. Had not for the Trump ban, Huawei would probably dethrone Samsung in EU as well, according to analysis in Feb https://www.theverge.com/2019/2/14/18224614/huawei-chinese-phones-europe-market-share-2018 https://www.theverge.com/2019/2/14/18224614/huawei-chinese-p... As a gadget enthusiasts, though overall the phone innovation is slowing down, but at least Chinese brands are the fewer left there to churn out marketable features, like those monstrous cameras and tricks to hide it. Apple and Samsung are just being lazy there, with incremental upgrade which command a premium
    - creddit 7y ago
      You said "US is by far the only market that Chinese phones haven't dominated" So Chinese phone manufacturers making up 1/3 of the European market, as per your link, is them dominating it??? Chinese phones don't dominate worldwide in the sense of geography. They dominate worldwide in the sense of units because they are the low margin, budget phone manufacturers supplying lower income parts of the world. Not a bad place to be, but doesn't remotely support your assertion above that the US is the only market they don't dominate. That's obviously wrong just from your own sources.
zwayhowder 7y ago
Go to Japan. A number of Panasonic, Fujitsu & Sony laptops are made there that are only ever sold in the domestic market because of the high costs. Though for the build quality they are still not too bad in terms of value. Of course their displays and RAM are probably made in Korea or China as are the SSDs and I've never pulled one apart to check the motherboard and battery providence... However they are definitely assembled in Japan.
- nrp 7y ago
  The RAM is fabbed in either South Korea (SK Hynix or Samsung) or the US (Micron), but Sharp, JDI, and to a lesser extent Panasonic still fab LCDs in Japan (though like the DRAM packaging, the display module assembly process may be in China).
- SmellyGeekBoy 7y ago
  Japan's economy fascinates me. The vast majority of the cars you see on the roads, computers in offices, TVs in hotel rooms, cameras in people's hands etc are Japanese. Amazing self-sufficiency in a world where globalisation is becoming the norm. Japanese-made products are also pretty universally considered to be very well designed and built, too.
  - esailija 7y ago
    Yeah raw materials and parts just fall magically out of the sky, as long as you do the final assembly (and sometimes not even that, sometimes only packaging a product is needed for "made in x") yourself then you are self-reliant.
    - FillardMillmore 7y ago
      No need for the heavy sarcasm - why not just point out the nebulousness of what 'Made in [Country]' means or provide some sources that give a more detailed look at Japan's manufacturing base so we all don't need to make assumptions?
  - deleted 7y ago
    [deleted]
simonh 7y ago
Assembling in China gets you credit with the Chinese government, which is useful to gain political protection and freer access to the Chinese market. But Samsung is getting squeezed out of the Chinese market, so that's not a big plus for them anymore.
deleted 7y ago
[deleted]
tooltalk 7y ago
> Also when we say "make" I assume we mean "assembles". Well, it's a bit more than that. While Samsung imports many parts and "assembles" all final products in Vietnam, there are also 200 suppliers and contractors who relocated and "make" their parts in Vietnam. Vietnam in pre-Samsung era was largely known for low-tech textile export. There wasn't a lot of infrastructure to support Samsung's smartphone operation in Vietnam. Samsung not only had to work with the Vietnamese gov't to create the industrial infrastructure that didn't exist, but the company also had to convince suppliers/contractors to set up shops in Vietnam. Samsung's products now accounts for about 1/3 of Vietnam's overall export.
shp0ngle 7y ago
One problem in Vietnam is that it really does NOT have the infrastructure that China has. (Just look at the state of public transport in China vs Vietnam.) It's better than Laos/Cambodia, but the streets are now flooded with cars far more than even 1 year ago, and the traffic is becoming a huge issue. And right now, with all the new factories, Vietnam is suddenly almost as polluted as China. (Just recently we have record AQI numbers here.) But of course rich countries don't care about that, as long as the phones are cheap... All in all, people are happy, since it helps their bottom line. But the infrastructure is not there yet to beat China.
- krageon 7y ago
  I am not sure why it is up to "rich countries" to fix Vietnam's pollution problem. Do not allow the building of factories that pollute a lot and it will get better. This is something Vietnam can do on it's own. Absolutely zero foreign interference required.
  - whoevercares 7y ago
    Wait aren’t we talking about an popular initiative to move all factories to Vietnam??
  - oblio 7y ago
    Easy for you to say. Not so easy for really poor people. Rich countries can help: for example Western companies can mandate that all their suppliers, for their entire chains, down to natural resources, have low levels of pollution. Vietnam and other countries like it will have to comply, in order to sell their products.
  - netsharc 7y ago
    That's a bit simplistic... "Mr. Tim Apple, we have 2 options to build the next iPhone factory, Vietnam and Laos. They're almost identical, except Vietnam will cost 5% more because of their anti-pollution laws.". What would you do in Tim Apple's position? Nike stopped using child labour because of (Western) public outcry, without it they'd go for the factory offering the cheapest price. Next you'll say, then it's up to the Vietnamese to have a public outcry about pollution. But corrupt governments seem to have a way to get away with anything, just look at the Dakota pipeline, or arctic drilling...
ksec 7y ago
I am somewhat surprised I am 24 hours and 175 comments late and yet no one has mentioned what I thought was the answer. Samsung is an extreme vertically integrated company. As far as I am aware there isn't any other company on the planet that is remotely close to this level of integration. Not even Cargrill. Samsung doesn't just make Display, NAND/ DRAM / Battery, Assembly, Controllers, MEMS, SoC, Foundry but also down to the Chemicals and Materials as well as actual assembly. Think of it as 80% of the whole Shenzhen Ecosystem. So while other companies have difficulties moving off that Shenzhen Ecosystem, the reality is Samsung was never part of it. Samsung Mobile is the front line to drive all volumes for each of its subsidiary to a sustainable level, before these subsidiary graduate to start selling to third parties. For Samsung, it is only a matter of government signing an agreement to tariffs, clean water, electricity and all these basic infrastructure. And if the government have trouble getting those up, not to worry, you could paid Samsung and Samsung will built those for you ( Samsung is also a construction company ) and promise to hire enough local workers. This is in deep contrast to Apple which doesn't actually own any part of the supply chain.

avocado4 7y ago

It takes time to move supply chains.

hardwaresofton 7y ago
Right but Samsung didn't start yesterday either -- I'm surprised news of Samsung starting to move their production (whenever that started) didn't spur other companies to move.
fauigerzigerk 7y ago
And crucially, it takes more time than imposing new tariffs.

latchkey 7y ago

I'm a tech expat living in Vietnam (from Bay Area) for the last 4 years. This is a really loaded question. You have to look into the politics of the VN govt, especially related to the fact that it is on the northern end of VN, closer to Hanoi... which has different politics than in the south. I've been to Hai Phong, which is the city in the north near the China border where most of this commerce happens. It is fascinating to see how big the houses are there. If you drive along the road to the airport it is literally filled with old men riding their nice shiny new bicycles and exercising by the side of the road. The tariffs definitely have people looking into Vietnam a lot more. I've driven (motorbike) the dirt backroads near the Chinese border where there is nothing but trees and mountains. There are literally trucks brining goods into and out of Vietnam (illegally) on hastily constructed dirt roads. You can see it in google maps even. I've seen how people have strung cables over rivers between China and Vietnam to ferry goods back and forth. So yea... it is happening, it just isn't hitting the news much. It is also happening in Cambodia and Laos. Look into the roads China is building and how Sihanouk is a literal Chinese eco disaster. Fascinating times...

AFascistWorld 7y ago
You can pay something like 50 RMB for them to motorbike you through the jungles into Cambodia or Loas (illegally) without any questions asked. There are also illegal but protected casinos near the Vietnam-China border entry, that only allow in Chinese nationals.
- latchkey 7y ago
  I did it myself. Even stood on the literal border of Vietnam and China. ;-) That is China in the distance and VN is building a wall of some sort. The road that you see is filled with trucks carrying stuff. Last picture is one of the dirt border backroads I was driving on... pretty epic trip. I also drove into Laos near the north side and all through it as well. The amount of Chinese influence in Laos is overwhelming. https://imgur.com/a/WGWv9kr https://imgur.com/a/WGWv9kr
tootie 7y ago
I don't doubt it, but there must be a very limited throughput. They can't be shipping even 1% of China's output over dirt roads.
selimthegrim 7y ago
Sihanoukville you mean
dageshi 7y ago
I visited Sihanoukville 11 years ago and 2 years ago. It's like a bomb of chinese money went off, that place is going to be the next las vegas/macau.

deleted 7y ago

[deleted]

duxup 7y ago

I think Samsung and their partners have the funds to make a full shift far more capably compared to companies who operate in China, or their manufacturer is in China... and don't have the resources / have their own concerns about leaving China. Also who knows how long Samsung has been working on such things.

tanilama 7y ago

Because most major manufacturers are mainly Chinese now(Huawei/Xiaomi/Oppo), and China is the NO1 market, why leave China? Samsung had been irrelevant in China for some years now, like below 1% market share. It just can't compete US is by far the only market that Chinese phones haven't dominated, but that is for a reason. Buying an Android in US there has surprising limited choices, Samsung/OnePlus/Pixel in that Order, and that is it. It is Duoploy either Samsung or iPhone, and others don't play.

creddit 7y ago
Right. The US only. Well, also Japan. Also, Korea. I guess also much of Europe too. Or Canada. But, yeah other than that. Which I guess is really just India and China. So I guess the reason is median/mean income??
- tanilama 7y ago
  https://www.counterpointresearch.com/global-smartphone-share/ https://www.counterpointresearch.com/global-smartphone-share... Adding Huawei+Xiaomi+Oppo+Vivo alone counts 45% of the world smart share already, by units, and the others consisting ZTE/Lenovo and other Chinese brands as well. Safe to say the Chinese phones are already 50% of all phones shipped. Yes, it is pretty dominating. Had not for the Trump ban, Huawei would probably dethrone Samsung in EU as well, according to analysis in Feb https://www.theverge.com/2019/2/14/18224614/huawei-chinese-phones-europe-market-share-2018 https://www.theverge.com/2019/2/14/18224614/huawei-chinese-p... As a gadget enthusiasts, though overall the phone innovation is slowing down, but at least Chinese brands are the fewer left there to churn out marketable features, like those monstrous cameras and tricks to hide it. Apple and Samsung are just being lazy there, with incremental upgrade which command a premium
  - creddit 7y ago
    You said "US is by far the only market that Chinese phones haven't dominated" So Chinese phone manufacturers making up 1/3 of the European market, as per your link, is them dominating it??? Chinese phones don't dominate worldwide in the sense of geography. They dominate worldwide in the sense of units because they are the low margin, budget phone manufacturers supplying lower income parts of the world. Not a bad place to be, but doesn't remotely support your assertion above that the US is the only market they don't dominate. That's obviously wrong just from your own sources.

zwayhowder 7y ago

Go to Japan. A number of Panasonic, Fujitsu & Sony laptops are made there that are only ever sold in the domestic market because of the high costs. Though for the build quality they are still not too bad in terms of value. Of course their displays and RAM are probably made in Korea or China as are the SSDs and I've never pulled one apart to check the motherboard and battery providence... However they are definitely assembled in Japan.

nrp 7y ago
The RAM is fabbed in either South Korea (SK Hynix or Samsung) or the US (Micron), but Sharp, JDI, and to a lesser extent Panasonic still fab LCDs in Japan (though like the DRAM packaging, the display module assembly process may be in China).
SmellyGeekBoy 7y ago
Japan's economy fascinates me. The vast majority of the cars you see on the roads, computers in offices, TVs in hotel rooms, cameras in people's hands etc are Japanese. Amazing self-sufficiency in a world where globalisation is becoming the norm. Japanese-made products are also pretty universally considered to be very well designed and built, too.
- esailija 7y ago
  Yeah raw materials and parts just fall magically out of the sky, as long as you do the final assembly (and sometimes not even that, sometimes only packaging a product is needed for "made in x") yourself then you are self-reliant.
  - FillardMillmore 7y ago
    No need for the heavy sarcasm - why not just point out the nebulousness of what 'Made in [Country]' means or provide some sources that give a more detailed look at Japan's manufacturing base so we all don't need to make assumptions?
- deleted 7y ago
  [deleted]

simonh 7y ago

Assembling in China gets you credit with the Chinese government, which is useful to gain political protection and freer access to the Chinese market. But Samsung is getting squeezed out of the Chinese market, so that's not a big plus for them anymore.

deleted 7y ago

[deleted]

tooltalk 7y ago

> Also when we say "make" I assume we mean "assembles". Well, it's a bit more than that. While Samsung imports many parts and "assembles" all final products in Vietnam, there are also 200 suppliers and contractors who relocated and "make" their parts in Vietnam. Vietnam in pre-Samsung era was largely known for low-tech textile export. There wasn't a lot of infrastructure to support Samsung's smartphone operation in Vietnam. Samsung not only had to work with the Vietnamese gov't to create the industrial infrastructure that didn't exist, but the company also had to convince suppliers/contractors to set up shops in Vietnam. Samsung's products now accounts for about 1/3 of Vietnam's overall export.

shp0ngle 7y ago

One problem in Vietnam is that it really does NOT have the infrastructure that China has. (Just look at the state of public transport in China vs Vietnam.) It's better than Laos/Cambodia, but the streets are now flooded with cars far more than even 1 year ago, and the traffic is becoming a huge issue. And right now, with all the new factories, Vietnam is suddenly almost as polluted as China. (Just recently we have record AQI numbers here.) But of course rich countries don't care about that, as long as the phones are cheap... All in all, people are happy, since it helps their bottom line. But the infrastructure is not there yet to beat China.

krageon 7y ago
I am not sure why it is up to "rich countries" to fix Vietnam's pollution problem. Do not allow the building of factories that pollute a lot and it will get better. This is something Vietnam can do on it's own. Absolutely zero foreign interference required.
- whoevercares 7y ago
  Wait aren’t we talking about an popular initiative to move all factories to Vietnam??
- oblio 7y ago
  Easy for you to say. Not so easy for really poor people. Rich countries can help: for example Western companies can mandate that all their suppliers, for their entire chains, down to natural resources, have low levels of pollution. Vietnam and other countries like it will have to comply, in order to sell their products.
- netsharc 7y ago
  That's a bit simplistic... "Mr. Tim Apple, we have 2 options to build the next iPhone factory, Vietnam and Laos. They're almost identical, except Vietnam will cost 5% more because of their anti-pollution laws.". What would you do in Tim Apple's position? Nike stopped using child labour because of (Western) public outcry, without it they'd go for the factory offering the cheapest price. Next you'll say, then it's up to the Vietnamese to have a public outcry about pollution. But corrupt governments seem to have a way to get away with anything, just look at the Dakota pipeline, or arctic drilling...

ksec 7y ago

I am somewhat surprised I am 24 hours and 175 comments late and yet no one has mentioned what I thought was the answer. Samsung is an extreme vertically integrated company. As far as I am aware there isn't any other company on the planet that is remotely close to this level of integration. Not even Cargrill. Samsung doesn't just make Display, NAND/ DRAM / Battery, Assembly, Controllers, MEMS, SoC, Foundry but also down to the Chemicals and Materials as well as actual assembly. Think of it as 80% of the whole Shenzhen Ecosystem. So while other companies have difficulties moving off that Shenzhen Ecosystem, the reality is Samsung was never part of it. Samsung Mobile is the front line to drive all volumes for each of its subsidiary to a sustainable level, before these subsidiary graduate to start selling to third parties. For Samsung, it is only a matter of government signing an agreement to tariffs, clean water, electricity and all these basic infrastructure. And if the government have trouble getting those up, not to worry, you could paid Samsung and Samsung will built those for you ( Samsung is also a construction company ) and promise to hire enough local workers. This is in deep contrast to Apple which doesn't actually own any part of the supply chain.