Microsoft shifts bulk of Nokia production to Vietnam

(VOV) - Microsoft, which took over Nokia in a US$7.2 million deal last April, is closing all its plants in Hungary, contracting production in China and Mexico, and shifting the bulk of phone manufacturing to Bac Ninh province.

Earlier, in July, Microsoft announced that as part of the restructuring of Nokia, it is laying off approximately 18,000 staff worldwide, with the lion’s share of job losses occurring in China.

In an email to company staff, Stephen Elop, Microsoft’s Design Director, said the software company’s overall goal is to shift its manufacturing and marketing units to new markets where Windows Phone gain advantages.

Microsoft’s production will be restructured according to a new strategy, aimed at taking full advantage of integration opportunities and relocated to Bac Ninh province in Vietnam, Elop said.

The facilities in Bac Ninh will be upgraded to 39 production lines by the end of 2014 from six at the end of 2013 and output will be increased threefold over last year’s output.

Meanwhile Samsung – the world largest producer of Smartphone Android – is planning to move most of its production units from China to Vietnam, the Chinese press announced in May.

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Samsung Electronics Vietnam has invested US$2 billion in building a hi-tech complex in Thai Nguyen and Samsung Electro-mechanics Vietnam also poured an additional US$1.2 billion into the complex.

It is expected that when Yen Binh Industrial Zone in Thai Nguyen is fully operational in 2015, Vietnam will manufacture more than 80% of the mobile phones sold by Samsung.

Intel and LG also own more than US$1 billion of production lines in Vietnam. In fact, many multinational groups have chosen Vietnam as their destinations when facing disadvantages in China.

According to a recent survey conducted by the Japan External Trade Organisation (JETRO), the average worker wage in Beijing is US$466 per month while in Hanoi is just US$145.

Vietnam has stable politics and a young hard working labour force. Additionally, lower production costs and the Government’s open door policies have made Vietnam the number one choice to conduct business of many multinational groups.