A strategic evolution in Korea-Vietnam ties

South Korean President Lee Jae Myung’s state visit to Vietnam, accompanied by the leaders of Samsung, SK Group, Hyundai Motor, and LG, marked a structural shift in bilateral relations.

- By Eddy Hong

The partnership is moving beyond traditional manufacturing towards an integrated model built on three new pillars: supply chain resilience, technology co-development, and industrial alignment.

The presence of all four chairmen alongside a roughly 200-member economic delegation signals that South Korea views Vietnam not as a peripheral production base, but as a strategic node in its next industrial cycle.

The most immediate priority is expanding outsourced semiconductor assembly and testing (OSAT) capacity. This is a time-sensitive window: Vietnam’s current package of high-tech tax incentives operates on a roughly four-year horizon, which means investment decisions made in 2026-2027 will shape who captures the cost and policy advantage through the end of the decade.

Critically, OSAT expansion alone is not enough. South Korean firms should simultaneously localise upstream suppliers of materials, components, and equipment. This dual approach reduces reliance on China-centric supply chains and transforms Vietnam from a standalone production site into a self-sufficient semiconductor cluster.

Samsung’s recent investment momentum including the $1.2 billion Samsung Electro-Mechanics No. 2 plant in Thai Nguyen province provides a credible anchor around which South Korean mid-cap companies in substrates, chemicals, and test equipment can cluster.