© Reuters. FILE PHOTO: Samsung smartphones are pictured in a shop in Hanoi, Vietnam, November 9, 2022. REUTERS/Thinh Tien Nguyen NO RESALES. NO ARCHIVES/File Photo
HANOI (Reuters) – South Korean electronics giants Samsung (KS:) and LG plan to pour billions of dollars of additional investment into Vietnam, state media reports and the Vietnamese government said on Tuesday.
The announcement comes after Samsung cut smartphone production in Vietnam twice this year in response to weaker global demand.
Samsung Electronics (OTC:), the largest single foreign investor in Vietnam, will invest $2 billion more in the Southeast Asian country, raising its total to $20 billion, Vietnamese state media said.
Samsung has for years produced about half of its smartphones in Vietnam and accounts for nearly a fifth of the country’s overall exports.
The additional investment will further firm up Vietnam as Samsung’s key production site, reported Vietnam News Agency, following a meeting on Tuesday in Seoul between Vietnamese President Nguyen Xuan Phuc and the company’s chief executive Han Jong-hee.
Samsung did not immediately respond to a request for comment.
Separately, the Vietnamese government said in a statement that LG would also invest $4 billion more in the country to make it a smartphone camera production hub.
The state media report and the government statement did not provide further details on the investment by the two companies.
LG, which has so far invested $5.3 billion in Vietnam to make such products as electronics home appliances, cameras and car parts, did not immediately respond to a request for comment.
The announcements came as Vietnam and South Korea said on Tuesday they upgraded their relations to “comprehensive strategic partnership”, which Vietnam has so far established only with China, Russia and India.
The two countries aim to raise bilateral trade to $100 billion next year, and to $150 billion a year by 2030, up from $78 billion last year.
Vietnam has over the last decade emerged as one of the most attractive production hubs for electronics companies, but weakening global demand has prompted production cuts this year.