Samsung to invest $3bn in new smartphone factory

Korean tech firm Samsung has applied for a license to build a second smartphone factory in northern Vietnam, an investment expected to be worth $3 billion (£1.8 billion).

The company plans on building the factory in the Thai Nguyen province, where it opened its first smartphone factory back in March after a $2 billion (£1.2 billion) investment.

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A statement from a Samsung official established that the company is in negotiations with the Vietnamese government, confirming an earlier report by Dau Tu, a newspaper controlled by Vietnam's Planning and Investment Ministry.

"The $3bn investment figure is the maximum amount that can be invested during the period, which is still under discussion with the Vietnamese government," said the official.

"There are further details to be fixed before the final approval of the licence, and therefore, the specific schedule and the size of the investment are still not yet decided."

Samsung's first factory generated $1.9 billion (£1.2 billion) in the first four months of operation and Samsung is now looking to boost its production in Vietnam in order to reduce cost and better compete with cheaper devices built by Chinese companies.

Smartphones and their accessories became the biggest money earner in Vietnam last year and, so far this year, export revenue in the industry has reached 16 per sent of the country's total at around $19.2 billion (£12 billion).

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The company's total revenue is expected to jump more than 67 per cent next year, said the government in a statement posted earlier this month.

This news follows another win for the company as a subsidiary of the electronics giant, Samsung Display Co Ltd, announced in July that it received regulatory approval to build a $1 billion (£630 million) display module assembly plant in the country.