This article is from WeChat official account:Ningnanshan (ID: ningnanshan2017), author: Shenzhen, southern Ningxia Hill, from chart title: vision China

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Vietnam’s export data can be easily found on the WTO’s official website. From USD 72.237 billion in 2010, it soared to USD 264.273 billion in 2019, an increase of 265.8%.

The same query of China’s export data on the WTO’s official website has increased from US$1.57775 trillion in 2010 to US$2.49946 trillion in 2019, an increase of 58.4%. This growth rate is obviously not as good as Vietnam.

The multiple of China’s exports compared to Vietnam’s exports has dropped from 21.8 times in 2010 to 9.46 times in 2019. Vietnam conducted a 10-year census in 2019. As of April 1, 2019, Vietnam The total population is 96,208,800, and the population of China is 14.55 times that of Vietnam.

Look at the export growth rate in 2019, VietnamAn increase of 8.44%, China only increased by 0.5%.

In other words, not only has Vietnam’s per capita export value surpassed ours, but the growth rate is also faster than ours.

Some low-end and even mid-end manufacturing industries in China are indeed shifting to Vietnam, and the representative ones are three companies:

The first is Baocheng Industrial in Taiwan, which is the world’s largest foundry for sports and leisure footwear. According to its 2019 financial report, its revenue is as high as NT$313.156.6 billion, and the RMB is almost RMB 72.83 billion(According to NTD: RMB 4.3: 1 exchange rate), as described in its financial report:

“The company is mainly engaged in the manufacturing of footwear, including OEM manufacturing and OEM design and manufacturing for international brands such as Nike, adidas, Asics, New Balance, Timberland, Salomon and Puma.(OEM/ODM) all kinds of footwear, mainly sports shoes, accounted for more than 70% of the revenue of the footwear manufacturing business, and also engaged in the manufacturing of footwear accessories.”

In short, in recent years, foreign sports shoes such as Nike and Adi have been mainly made in Vietnam.

The biggest news of this company in mainland China is the workers’ strike at its Dongguan Yuyuan Shoe Factory in 2014. The number of people reached tens of thousands. (Media reports vary, some say 30,000 people, and Citi’s report says 40,000 people are involved). The reason is that the company failed to pay social security in full. As a result of the incident, the company paid social security and increased the allowance of 230 yuan per month. At the same time, it also paid social security in full for the new wages of employees.

In the company’s 2014 financial report, it was mentioned that the increase in expenditure in one year exceeded 130 million US dollars:

1. The increase in employee benefits for Gaobu Shoe Factory and other factories totaled US$90 million. As of March 31, 2015, US$54.6 million had been paid. (It is further confirmed in the 2015 financial report that a total of 75.53 million US dollars has been paid as of December 31, 2015)

2. Gaobu Shoe Factory and other factories adjusted employee benefits and monthly living allowances, and the combined company increased expenditures of approximately US$31 million and US$46 million from May 2014 to December 2014, respectively.

We opened the previous financial report of Baocheng, and we can see the process of the company’s declining manufacturing ratio in mainland China.

In the 2011 financial report, it was written like this:

“At the end of 2011, the group had 255, 134, 140, 1 and 8 production lines in China, Indonesia, Vietnam, Taiwan and other regions, totaling 538 production lines.”In other words, the footwear production line in mainland China accounted for 47.4% at the end of 2011.

In the 2012 financial report, it was written like this:

“At the end of 2012, the group had 204, 157, 156, 1 and 5 production lines in China, Indonesia, Vietnam, Taiwan and other regions respectively, totaling 523 production lines, and annual footwear production capacity About 390 million pairs.” From the perspective of the number of production lines, it is obvious that within a year, the proportion of production lines in mainland China has dropped to 39%.

The financial reports for 2013 and 2014 did not disclose production line and output distribution data. In the 2015 financial report, Mainland China, Vietnam and Indonesia accounted for 25%, 42% and 32% of the total output respectively, while others including the United States, Mexico, Cambodia, Bangladesh and Myanmar accounted for about 1%.

That is, by 2015, the proportion of production in mainland China has dropped to 25%:

In 2016, Mainland China, Vietnam and Indonesia accounted for 20%, 44% and 34% of the company’s total output, respectively. Other regions including Cambodia, Bangladesh, and Myanmar accounted for 2%.

In 2017, Vietnam, Indonesia and Mainland China accounted for 45%, 36%, and 17% of the company’s total output, respectively, while others including Cambodia, Bangladesh, and Myanmar accounted for 2%.

In 2018, Vietnam, Indonesia, and China accounted for 46%, 37%, and 14% of the total output respectively, while others including Cambodia, Bangladesh, and Myanmar accounted for 3%.

By 2019, the proportion of production in mainland China has dropped to 13%:

“Vietnam, Indonesia, and China accounted for 44%, 39%, and 13% of the company’s total output in 2019. Other regions including Cambodia, Bangladesh, and Myanmar accounted for 4%. In 2020 It will continue to use Vietnam, Indonesia and China as the main production bases.”

The second iconic company is South Korea’s Samsung.

In December 2018, Samsung closed its Tianjin mobile phone manufacturing plant, and its Huizhou mobile phone manufacturing plant ceased operations on September 30, 2019, thus completely ending Samsung’s mobile phone manufacturing in China.

According to analysts’ estimates, Huizhou Samsung also accounted for 17% of Samsung’s global mobile phone production capacity in 2017.

At the same time, Samsung invested heavily in Vietnam and India.

Samsung established the first smartphone factory in Bac Ninh Province, Vietnam in 2008.(The company referred to as SEV, Samsung Electronics Vietnam; SEV) , And established another smart phone factory (referred to as SEVT, Samsung Electronics Vietnam – Thai Nguyen; SEVT) in Taiyuan Province in 2013.

The picture below is the Hanoi Times based on Samsung’s 2019 financial report. The total revenue of Samsung’s four main subsidiaries in Vietnam in 2019 reached 65.8 billion U.S. dollars, a slight decrease from the previous year’s 67.1 billion U.S. dollars.

The two main mobile phone factories, SEV and SEVT, can be seen with revenues of 19.2 billion US dollars and 28.2 billion US dollars respectively. In addition, Samsung Display Vietnam (Samsung Display Vietnam, SDV)’s revenue is 14300 million US dollars.

There is also a Samsung Electronics Ho Chi Minh(SEHC) with revenue of 4.2 billion US dollars. Mainly do TV sets.

Samsung’s mobile phone production capacity in Vietnam currently accounts for about 50% of the world’s total. The second largest manufacturing location for Samsung’s mobile phones is India, and the third is South Korea, which accounts for about 10% of the production capacity. There is also a Brazilian factory.

For comparison, the figure below shows the production capacity distribution of Samsung mobile phones in 2011. China still accounted for 51% at the time, but now it has become zero. Obviously, China’s production capacity has been transferred to Vietnam and India, and Samsung’s production capacity ratio in South Korea has not changed much.

The third iconic company is Apple.

Apple is the top brand in the global electronics industry and represents the highest level of technical requirements.

Here are two iconic products, AirPods and iPhone.

Apple’s AirPods are mainly manufactured by Luxshare Precision, GoerTek, Inventec and Hongzhun under Hon Hai in Mainland China. Among them, Luxshare Precision is the largest supplier, and the company has also achieved a skyrocketing revenue due to the production of AirPods for Apple. Luxshare Precision’s revenue in 2019 was 62.52 billion yuan, a year-on-year increase of 74%; net profit attributable to the parent was 4.71 billion yuan, a year-on-year increase of 73%.

As the second largest foundry supplier of AirPods, Goertek has also benefited a lot, relying on AirPods’Shipment, the revenue of Goertek’s intelligent acoustic machine in 2019 soared by 117.58% year-on-year, and its proportion of total revenue rose to 42.17%, replacing precision components to become the main revenue and core driving force of Goertek.

The entire company achieved revenue of 35.14 billion yuan in 2019, a year-on-year increase of 47.99%, and net profit achieved 1.28 billion yuan, a year-on-year increase of 47.58%.

Luxshare Precision and GoerTek are also the two most active domestic companies in the electronics industry to build factories in Vietnam, and this is actually more of Apple’s strategic arrangement, because the two companies’ largest customers are Apple . Take Goertek as an example. In 2019, Apple’s orders accounted for as high as 40.65%, while Luxshare Precision was as high as 55.43%.

In 2019, Apple began to conduct AirPods production testing in Vietnam, with the participation of Luxshare Precision and GoerTek’s Vietnam factories.

According to a report from the Nikkei Economic Review, in the first quarter of 2020, Apple began mass production of AirPods in Vietnam for the first time. About 3 million to 4 million were produced in the first quarter. This number is already quite large. The scale is large, because the total sales of AirPods in 2019 is close to 60 million, and this year is expected to exceed 90 million.

It can be considered that Vietnam has accounted for more than 15% of the foundry share of AirPods.

In May 2020, according to a foreign media macrumors report, some users have received the charging box with “Assembled in Vietnam” (Assembled in Vietnam) this week. AirPods Pro(the headset was released in October 2019), indicating that in addition to AirPods, AirPods Pro also Produced in Vietnam.

And On Luxshare’s official website, there is a three-year Previous news: On December 4, 2017, Apple’s CEO Cook visited Luxshare Precision, which became Apple’sThe foundry supplier of AirPods.

When asked “what do you think about the shift of the electronics industry chain to low-cost regions such as India and Southeast Asia”, Cook said that Apple does not currently do this.

“We will not do this. Our product manufacturing requires deep engineering and technical capabilities, flexible supply chain management, and excellent quality. We will not shift for cost.”

There was no problem with what Cook said at the time. Although Apple started producing the iPhone SE in India for the first time in 2017, until this year, the proportion of iPhone production in India was also very low. According to counterpoint data, the output of iPhones made in India in Q1 of 2020 can only meet 29% of the demand in the Indian market, and 400,000 units have been exported.

In 2019, less than 2 million iPhones were sold in India. Compared with the annual sales of Apple’s mobile phones of about 200 million units, coupled with the severe epidemic in India this year, it is estimated that they will be manufactured in India throughout 2020. IPhone accounted for less than 2%.

Although progress is slow, generally speaking, the proportion of iPhone production in India will gradually increase.

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Back to the protagonist of this article, Vietnam.

As far as AirPods are concerned, they will be mass-produced in Vietnam for the first time in 2020, and their proportion will soon exceed 15%, and the proportion will eventually appear to be high, which shows that Vietnam’s foundry technology has become increasingly mature Up. Not only can they handle large-scale manufacturing of Samsung mobile phones and TVs, but they have also begun to manufacture Apple products on a large scale.

Apple currently has no plans to produce iPhone in Vietnam, and it is still mainly produced in China.

Luxshare acquired Wistron’s factory in mainland China, a Taiwanese foundry in July 2020. On July 17, Luxshare Precision issued an announcement stating that Luxshare Precision and its controlling shareholder Luxshare Co., Ltd. planned to acquire 100% equity of Jiangsu Wistron Kunshan Weixin with 3.3 billion cash. Luxshare Precision invested 600 million in this acquisition. yuan. After the completion of the transaction, Luxshare Precision will become Apple’s first foundry manufacturer in mainland China. Apple’s intention to support Luxshare Precision to start iPhone foundry in mainland China is already very obvious.

In addition, according to A