Four Reasons the North Attracts High-Value Industries
The North is leading in attracting foreign direct investment (FDI), especially in high-value industries such as automobiles, electronics and solar energy. The reasons are attributed to its favorable geographical location, developed infrastructure, abundant industrial land fund and reasonable rental prices.
The North attracts 7/10 leading corporations in the semiconductor sector. Bac Ninh leads with the participation of 4 large corporations in the sector, including Samsung Electronics, Amkor Technology, Hanmi Semiconductor and Victory Giang.
The main difference between the Northern and Southern markets lies in the industrial focus and infrastructure advantages. The Northern Key Economic Zone includes Bac Ninh, Hai Phong, with its strategic location near China and the North Asian market, which is beneficial for industries focusing on manufacturing. The Northern provinces have the advantage of abundant land fund and reasonable rental prices. In the first half of 2024, the Northern Economic Zone will provide 12,985 hectares of industrial land in 73 industrial parks, up 12% year-on-year thanks to the expansion of industrial parks in Hai Phong, Hung Yen and Hai Duong.
The rental price of industrial land in the North is 28% lower than in the South. The Northern provinces have an average occupancy rate of 78%, with an average land price of USD 132/m2/single lease (USD 183/m2/single lease in the South) for all long-term leases.
At the same time, as Vietnam is aiming to increase value added in manufacturing industries, education and training reform to improve labor skills is necessary. However, despite the abundant labor force, especially in the North, the majority of workers are still low-skilled.
