BANGKOK, Thailand, Oct. 13 (Korea Bizwire) – The recent Samsung troubles have weighed heavily on Vietnam’s exports, as the country serves as one of the major production hubs for the smartphone giant.
According to a local source, Vietnam’s September exports amounted to $15 billion, a 6.8 percent decline from August, while exports specific to smartphone components fell by 17.4 percent to $560 million.
This is largely the result of Samsung halting production of the Galaxy Note 7 on August 31 after some of its batteries were found to be defective, said the source. The tech company ultimately announced a full stop to its latest phablet venture on Tuesday.
Samsung became the biggest foreign investor in Vietnam, with Samsung Electronics and other Samsung affiliates investing some $15 billion in the country since 2008 after establishing a cell phone manufacturing complex in the country. Their last year’s export volume alone was worth roughly $33 billion.
“(Samsung’s) exports account for about 20 percent of the nation’s total shipments, and its decision to suspend production of the Galaxy Note 7 will certainly hurt Vietnam’s exports this year,” said Nguyen Mai, Chairman of Vietnam’s Association of Foreign Invested Enterprises in an interview with Bloomberg.
The Note 7 crisis will also hold back Vietnam’s 2016 target economic growth of 6.7 percent.
“It’s another shock,” said Alan Pham, chief economist at VinaCapital Group. “But it’s also a result of focusing on one specific company or industry.”
By Lina Jang (email@example.com)