00:00Yo! This is Sensor Studio, always pushing with Sangsy Bike.
00:03Samsung Electronics has been showing tremendous growth recently.
00:05Thanks to the semiconductor supercycle, they're experiencing incredible growth.
00:07But there's often talk that if Samsung sneezes, Korea catches a cold.
00:10Actually, if Samsung collapses, the Korean economy would take a huge hit.
00:13But it turns out there's a country that would be hit even harder than Korea, did you know that?
00:17Right now, Vietnam, a rising powerhouse in Southeast Asia, would take a huge hit.
00:20With a population of 100 million and a GDP of about 468.4 billion dollars,
00:25this country is practically staking its future on Samsung.
00:28If Samsung falters, the entire Vietnamese economy would be shaken.
00:31Let's take a look at this shocking fact today.
00:33Let's take a look right away.
00:35Some of you might say I'm just spouting national pride as soon as I start.
00:37But interestingly, this is a fact.
00:39The relationship between Samsung and Vietnam goes beyond that of a simple foreign investment company and a foreign government.
00:44Samsung in Vietnam is not just a foreign company, but acts as a kind of engine driving the economy.
00:48Currently, what is the largest company in Vietnam?
00:51Actually, you already know the answer. It's Samsung.
00:53In 2024, Vietnam Report Corporation announced the VNL VNR 500 ranking of the top 500 companies in Vietnam for 2023.
01:01And here, Samsung Electronics Vietnam Thai Nghien ranked first.
01:04Samsung Electronics Vietnam subsidiary is the largest company in Vietnam.
01:07Samsung has 28 factories across 11 provinces that produce electronic products in Vietnam.
01:12Among these, 25 factories are concentrated in Northern Vietnam and the remaining three are in Southern Vietnam.
01:17They actually played an important role in Vietnam's development by exporting more than $65 billion, which is about $93 trillion.
01:23One, this accounts for 13.7% of Vietnam's total exports. That's huge, isn't it?
01:28On top of that, the profits earned by Samsung's major subsidiaries in Vietnam alone are close to $60 trillion won,
01:33so they play a crucial role in Vietnam's economy.
01:34The Thai Nguyen manufacturing subsidiary earned $30.6393 trillion won the Vietnam Manufacturing Corporation, made $20.1541 trillion won, and
01:42the Ho Chi Minh Home Appliance Complex also made a profit of $6.153 trillion won.
01:46Currently, more than 50% of Samsung's global mobile phone production is done in Vietnam.
01:50The smart mobile products produced at Samsung's factories in Vietnam are exported to 128 countries around the world.
01:55According to data from the Vietnamese Statistics Office, Samsung Vietnam's sales account for 20.3% of Vietnam's GDP. This
02:03shows just how much influence Samsung Vietnam has within the country.
02:06And it also shows how much Vietnam depends on Samsung.
02:09In addition, Samsung Vietnam directly employs more than 160,000 local people. When you factor in its supplier companies, it
02:14indirectly creates hundreds of thousands of jobs.
02:16If you look at the various figures and statistics I mentioned earlier, it's no exaggeration to say that Samsung is
02:21the heart of the Vietnamese economy.
02:23Since establishing its first factory in Bik Ninh, Vietnam in 2008's Samsung Electronics has continued to make large-scale investments
02:28for 17 years, playing a pivotal role in the development of Vietnam's manufacturing industry.
02:32Currently, Samsung has invested $22.4 billion in Vietnam, which is close to $32 trillion won.
02:37Thanks to this, the number of partner companies increased from 25 in 2014 to 309, now more than a 12
02:42-fold increase.
02:42Now, it is said that Samsung invests about $1 billion annually, which is about $1.4 trillion won in Vietnam.
02:48Currently, the cumulative amount of foreign direct investment in Vietnam has reached $86 billion, which is $117.7168 trillion won,
02:55making it the highest among all countries in the world.
02:57In fact, Vietnam is Samsung Electronics' largest smartphone production base and a key strategic location for targeting the rapidly growing
03:02Southeast Asian market.
03:03As I mentioned earlier, 50% of Samsung's mobile phone production comes from Vietnam.
03:07Also, the electronics manufacturing plant in Ho Chi Minh City is considered the largest in Southeast Asia.
03:10On top of that, they're not just expanding production facilities, but also putting a lot of effort into strengthening their
03:15research and development capabilities.
03:16Recently, the Samsung Research and Development Center established in Ho Chi Minh City is said to be the largest R
03:21&D facility in Southeast Asia.
03:22It provides local technical talent with opportunities to participate in advanced technology development.
03:26Especially during the Galaxy S24 series, the Vietnamese research team is said to have played an important role.
03:31But what would happen if Samsung reduced production or faltered in Vietnam? The consequences would be unimaginably severe.
03:37First of all, as I mentioned earlier, Samsung Vietnam's sales account for 20.3% of Vietnam's GDP.
03:42The moment Samsung faces difficulties and reduces its business in Vietnam, it means the Vietnamese economy will immediately take a
03:47hit.
03:48Even if Samsung sells off or reduces some of its businesses, it would lead to a decrease in GDP.
03:52Above all, Samsung directly employs more than 160,000 people.
03:56If you add the number of employees from partner companies, even more people are working for Samsung.
04:00Because of this, there's a high possibility that the unemployment rate could rise sharply.
04:03Fortunately, Vietnam's current unemployment rate is about 2.37, so it doesn't seem like the impact will be as severe
04:10as we thought.
04:10However, since Samsung Vietnam has a huge influence in Vietnam, this could snowball and have a negative impact on the
04:15country.
04:16Above all, Vietnam's trade balance will deteriorate rapidly.
04:19This could lead to a decline in the value of the Vietnamese dong and cause economic instability.
04:24Then, some of you might be wondering, when did Samsung start investing so much in Vietnam?
04:27The decisive reason Samsung began investing in Vietnam was actually because of China.
04:32There's a reason for this.
04:34China was once called the factory of the world, with factories from all over the globe lined up there.
04:39So, countries around the world built factories in China like crazy.
04:41Whether they were large corporations or small and medium-sized businesses, everyone made sure to have at least one factory
04:46in China.
04:47Thanks to that, we benefited a lot from China's cheap labor.
04:49On the other hand, China also experienced significant growth thanks to investments from many companies.
04:53However, after President Xi Jinping came to power, China began imposing various restrictions on foreign companies.
04:57Today, this phenomenon is referred to as de-China, or decoupling from China.
05:01The de-China phenomenon is becoming more and more severe.
05:03The Korea Institute for International Economic Policy explained that,
05:06as US-China competition and geopolitical conflicts have intensified recently,
05:09the two sides have become more polarized, and the fragmentation of global supply chains has emerged.
05:12It also stated that the move away from China in the global economy has become a key issue.
05:15In fact, the proportion of exports to China has been gradually decreasing.
05:18It went from 26.8% in 2018 to 25.3% in 2021, and then down to 19.7
05:23% in 2023.
05:25It's not just that companies are leaving China, but even doing business with China itself is gradually decreasing.
05:29There are mainly three reasons for moving away from China.
05:31Currently, labor costs in China have increased a lot compared to the past.
05:33The average monthly wage of Chinese workers rose from $379.6 in 2012 to $812.6 in 2021, an increase
05:41of 114%.
05:42Now, when you hire a Chinese worker, you have to pay a monthly salary well over $1,000,001.
05:46On top of that, the young labor force in China is rapidly decreasing, so labor costs could rise even faster.
05:50Currently, China's total fertility rate is 1.18.
05:53Because of this, for the past 10 years or so, both Chinese and foreign companies have been looking for regions
05:57with lower production costs due to rising wages and land prices in China.
06:00It's similar to how, in Korea, when the shoe and textile industries lost their competitiveness, factories were relocated to places
06:05like China and Southeast Asia.
06:07In fact, Samsung began expanding into Vietnam in earnest in 2008.
06:11This also happened because they were looking for regions with lower wages, and I think this is the biggest reason
06:15China's policy direction is hostile toward foreign companies.
06:17It would be good to give some examples of this.
06:19Nike, in June 2023, discontinued its Nike Run Club and Nike Training Club app services in the Chinese market.
06:25These apps allowed users to track their jogging or workout progress and compete with other users.
06:29This app was very popular in China, with over 8 million users, but suddenly, they stopped the service.
06:34They didn't reveal the reason.
06:35Since 2022, China has passed the Personal Information Protection Law and the Data Security Law, which basically prohibit collecting or
06:42using personal information without the individual's consent.
06:44But they used this to target Nike.
06:46In this case, Nike could be fined up to 5% of its earnings, so for Nike, it's better to
06:50just pull out.
06:51On top of that, Airbnb also withdrew from China, citing COVID-19 quarantine policies as the reason.
06:55And since Chinese companies are monopolizing the industries that foreign companies have withdrawn from, there are a lot of complaints
07:00from overseas companies.
07:01Above all, the conflict between the US and China is gradually intensifying.
07:04In this situation, the US is focusing on hitting China, imposing heavy tariffs on products made in China.
07:09Naturally, foreign companies with factories in China are also affected.
07:12In fact, in the case of Nintendo, the Switch production facilities were originally in China.
07:16But when the US raised tariffs on Chinese products, they moved the Switch production facilities to Vietnam.
07:21That's how they ended up leaving China.
07:22The location Samsung Electronics chose after leaving China was Vietnam.
07:26Today, just as Vietnam relies on Samsung, Samsung also depends on Vietnam to some extent.
07:31In the past, Korea and Vietnam pointed guns at each other and went to war, but now they have grown
07:35into economic partners who need each other.
07:36Samsung maintains its international competitiveness by taking advantage of Vietnam's cheap labor and production infrastructure.
07:41On the other hand, Vietnam has succeeded in achieving rapid economic growth through Samsung.
07:45However, what I am concerned about is that if mutual dependence becomes too deep, when one side faces difficulties, both
07:51sides could suffer significant damage.
07:53Therefore, it seems important for the two countries to maintain a balanced economic cooperation relationship.
07:58In conclusion, the Vietnamese economy today relies heavily on a giant company like Samsung.
08:01If it's around 20% of the GDP, that's enormous.
08:04But recently, since Samsung has been going through a lot of instability, Vietnam must also have a lot of concerns.
08:08What do you think about Vietnam's current situation, which is so heavily dependent on Samsung?
08:11Please let us know in the comments.
08:13That's all for this video.
08:14Bye!
