This month, we will focus on Vietnam ahead of the upcoming MTA Vietnam 2025 metalworking exhibition, held annually in Ho Chi Minh City. This medium-sized exhibition is expected to attract 450 exhibitors from 20 countries and nearly 20,000 industry professionals. It’s still not too late to book a flight and get a firsthand look at one of the hottest spots in our industry. Vietnam’s GDP grew 7.1% in 2024, with projections indicating around 6.5% growth in 2025. A key contributor to this growth is foreign direct investment (FDI) in manufacturing, which reached $29.7 billion in 2024 – a 26.3% increase from 2023. In 2025, FDI in manufacturing is expected to grow by 15% to 25%.
Key Drivers of Manufacturing Investment:
The global supply chain is shifting to diversify away from China. Vietnam is geographically close to established supply chains in semiconductors and electronics.
Singapore, South Korea, China, and Japan are significant investors. The United States is also a major player, but much of its investment is difficult to track, as it is funneled through Singaporean corporate entities.
Government support through tax incentives.
A young, plentiful, and affordable workforce in a nation with a population of 104 million. Low-level monthly wages in manufacturing are typically $300 to $400, compared to more than twice that in China.
Vietnam has already signed free trade agreements that facilitate favorable trade with the EU and most of its Asia-Pacific neighbors.
Vietnam has reported positive progress in negotiations with President Donald Trump’s administration. In 2024, Vietnam had the fourth-largest trade surplus ($142 billion) with the United States, so the incentives to reach an agreement are strong.
Challenges:
Vietnam is governed by a one-party system, the Communist Party of Vietnam. The next elections for the National Assembly are in March 2026, so there has been some slowdown in the approval of major projects until then. The general population elects assembly representatives that the party carefully vets, so there is little chance of major changes in the party’s governance policies. As such, self-inflicted disruptions in Vietnam’s upward economic performance trajectory are unlikely.
Since the government maintains centralized control, obtaining transparent data on the machine tool industry’s consumption parameters is often challenging. Among the major markets in Southeast Asia, Vietnam is the most difficult market for data access.
The ease of doing business in Vietnam and the country’s ranking in the Heritage Foundation’s Index of Economic Freedom are improving, but they still fall short of Western investors' expectations.
Major Investments:
China’s Envision Energy will begin construction in June 2025 of a $420 million 300-MW wind plant in northern Vietnam.
In April 2025, Taiwan’s Aeon Motor began producing gasoline-powered and electric scooters and motorcycles in Vinh Phuc Province in northern Vietnam. The total investment of $64 million has yet to be fully realized.
In March 2025, U.K.-based Zotefoams announced an investment of $17 million in southern Vietnam to produce cross-linked foams.
In March 2025, Japan’s Murata Manufacturing announced a $20 million investment in southern Vietnam. It is a global leader in ceramic capacitors, filters, and high-frequency parts commonly used in electronic devices.
Samsung, Foxconn, Pegatron, Goertek, and LG Electronics made investments totaling several billion dollars in the electronics sector in 2024.
In 2024, multibillion-dollar investments in the semiconductor sector were headlined by Intel and Nvidia.
For more information, please contact Mike Lauer at mlauer@AMTonline.org, and to learn how to take advantage of these opportunities, click here.
