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Jun 10, 2024 / 14:44

Samsung Vietnam’s plants bounce back with US$1.2 billion profit in Q1

The four factories in Vietnam contributed about 30% of the South Korean tech giant’s global revenue, totaling US$16.25 billion, up 12% on quarter.

In the first quarter of this year, Samsung's four factories in Vietnam posted a combined profit of nearly $1.2 billion, a significant turnaround from a loss of nearly $180 million from the last quarter of the previous year.

 Samsung Thai Nguyen from above. Photo: Samsung Electronics

During the last three months of last year, three out of the four Samsung plants in Vietnam reported losses. Specifically, Samsung Electronics Vietnam (SEV) in Bac Ninh suffered a loss of about $116 million, Samsung Thai Nguyen (SEVT) nearly $90 million, and Samsung Electronics HCMC CE Complex (SEHC) with a loss of $15 million. The only exception was Samsung Display Vietnam (SDV), which made a profit of over $40 million.

However, in the first three months of this year, these facilities returned to profitability. According to its audited financial report for Q1, Samsung Electronics posted revenues of $54 billion.

Of this, the four factories in Vietnam contributed about 30%, equivalent to $16.25 billion, an increase of approximately $2 billion in the previous quarter. The net profit from these plants was around $1.17 billion, accounting for over 23% of the parent company’s profit. Samsung Thai Nguyen was the largest contributor, with sales of $8.16 billion and a profit of $707 million. This was followed by Samsung Electronics Vietnam with $4.2 billion in revenue and $300 million in earnings.

Samsung Display Vietnam and Samsung Electronics HCMC CE Complex achieved revenues of $2.65 billion and $1.24 billion, respectively.

The display unit in Bac Ninh made a profit of around $123 million, while the HCMC facility made $40.7 million.

The group attributed the nearly 13% year-on-year increase in consolidated revenue to strong sales of the Galaxy S24 smartphone and higher memory semiconductor prices. Operating profit also rose, thanks to the profitability of the memory division. Additionally, the depreciation of the won against major global currencies had a positive impact on the group's overall results.

Samsung Electronics remains committed to Vietnam for the long term. During a meeting with Prime Minister Pham Minh Chinh last month, CFO Park Hark Kyu stated that Samsung plans to increase its investment in Vietnam by $1 billion annually. Furthermore, Samsung aims to increase the number of Vietnamese businesses in its supply chain and enhance collaboration on workforce training. Since 2014, the number of Vietnamese companies in Samsung’s supply chain has grown 12-fold, from 25 to 309.

Samsung is currently the largest foreign direct investor in Vietnam, with four factories in Bac Ninh, Thai Nguyen, and Ho Chi Minh City, and a total investment of over $22 billion in investment.

Mobile phones produced in Vietnam account for over 50% of Samsung’s global production. This year, the company expects to increase its export of these products by more than 10%, compared to nearly $56 billion in 2023.