Support industry taps growth opportunities from major investment projects

Vietnam, with its stable political climate, skilled workforce, and increasing focus on high-tech industries such as semiconductor chips, aviation, and high-speed rail, has become a magnet for foreign investors. These industries are paving the way for local support companies to make significant strides in the global supply chain.

Major investment projects unlock new opportunities

In December 2024, the KP Vina aircraft components manufacturing plant, which supplies parts for Boeing aircraft, officially began operations at the Da Nang Hi-Tech Park. This milestone highlights Vietnam’s potential to become a high-tech hub with a conducive environment for businesses to invest in advanced technologies and component manufacturing, particularly in the aviation sector.

Many Vietnamese support industry enterprises have already positioned themselves to engage with and produce for the aerospace sector. As one of the companies entering the global aerospace component manufacturing chain, Nguyen Hong Phong, CEO of An Mi Tools Company, explained that obtaining AS9100 certification will enable local firms to access the global aerospace supply chain. “Global airlines are keen to identify production units in Vietnam, offering an exciting and significant opportunity for the country’s support industries,” Phong noted.

In the semiconductor field, prominent global tech giants such as Qualcomm, Google, Meta, Lam Research, Qorvo, and AlChip are in the process of shifting their supply chains to Vietnam. The country currently has 174 foreign direct investment (FDI) projects in semiconductor technology, totaling nearly US$11.6 billion in registered capital.

Dr. Le Huy Khoi, Deputy Director of the Institute for Strategic Research and Policy under the Ministry of Industry and Trade, emphasized the vital role of the support industry in Vietnam’s economic growth. “Vietnam’s support industry has made significant progress, especially in providing materials and components for domestic manufacturers. Some products have already begun to be exported, contributing substantially to the national industrial sector’s growth,” Khoi said.

High-Speed railway project catalyzes economic growth

The North-South high-speed railway project, one of Vietnam’s most ambitious infrastructure undertakings, is poised to have a profound impact on the nation’s socio-economic development. Nguyen Van, Vice Chairman of the Hanoi Supporting Industry Association (HANSIBA), noted that this project presents an opportunity for companies to adopt, transfer, and master technologies, while also advancing the railway industry. It is expected to catalyze a breakthrough in the development of Vietnam’s support industry, particularly for businesses involved in mechanical engineering, automation, steel production, materials, and components.

However, Nguyen Van pointed out that to realize this vision, HANSIBA is collaborating with enterprises to propose direct collaboration between government bodies, ministries, and support industry associations, including HANSIBA. This collaboration will help assess production capabilities, supply capacities, and lay the foundation for cooperation with both domestic and international contractors before construction begins in 2027.

“By assessing the capabilities of support industry enterprises, ministries and relevant sectors will be able to implement specialized financial mechanisms, allocate capital, and offer technologies that enable local companies to invest and supply specific products,” Van said.

Establishing binding technology transfer mechanisms

Le Khac Bao, Deputy Head of the Industrial Management Division at Hai Phong’s Department of Industry and Trade, believed that binding mechanisms should be put in place for investors and enterprises when implementing projects in Vietnam.

Bao suggested that foreign-invested projects already operating in Vietnam should be required to facilitate technology transfer or provide opportunities for local support industries to participate in production processes, driving the growth of Vietnamese companies.

"In the industrial planning process, localities are advised to establish guidelines for developing specialized industrial zones or clusters, including support industry hubs. The Ministry of Industry and Trade's proposed regulations should prioritize these industrial linkages. Furthermore, policies aimed at attracting and training human resources to foster the growth of the support industry are essential," Bao proposed.