Global telecom equipment giants Ericsson and Nokia are reducing production in China.
Their suppliers, South Korean companies KMW and Ace Technologies are also developing and producing their goods in Vietnam facilities instead of those in China in reaction to this, TheElec learned on Tuesday.
The move by Ericsson and Nokia is becoming an opportunity for South Korean component and materials suppliers that have facilities in Vietnam, a person familiar with the matter said. Ratio stations made in China usually use local Chinese suppliers, they said.
KMW and Ace Technologies each supply their goods to Nokia and Ericsson, respectively.
The two also supply to their compatriot Samsung Electronics, which is expanding its network business.
Samsung Network closed its Chinese factory in Shenzhen in 2018 and shifted its production equipment there to Vietnam.
Samsung Network moved its headquarters last year from Gumi to Suwon. It also began mass production in Vietnam that year.
Most Korean suppliers have a good foundation in Vietnam as they followed large conglomerates like Samsung when they began to invest more in the Southeast Asian country, another person familiar with the matter said.
Vietnam now offers cheaper labor cost than China, and is attractive to these mid-sized suppliers.
Ace Technologies in March completed its new factory in Vietnam, which tripled its production capacity for radio systems and antenna filter units. It is planning to produce 100,000 units of 4G and 5G remote radio heads.