In the race to recalibrate global supply chains, Vietnam has emerged not as a fallback but as a formidable frontrunner. With a potent mix of free trade agreements, resilient infrastructure growth, and a reform-driven business climate, the country is entering 2025 with unmatched momentum. No longer merely a low-cost manufacturing alternative, Vietnam is carving out leadership in high-value sectors, such as semiconductors, electronics, and renewable energy. For forward-looking investors, the question is no longer “why Vietnam?”—but “which sector, and how soon?”

Vietnam’s Manufacturing Landscape in 2025

Vietnam’s industrial sector contributed 7.32% year‑on‑year value‑added growth in Q1 2025, adding approximately 2.4 percentage points to overall GDP expansion, with manufacturing and processing alone growing by 9.28%. Fueled by FTAs like CPTPP, EVFTA, and RCEP and validated by the global “China+1” strategy from US companies Vietnam is emerging as a pivotal production destination. Strong policy support, especially through industrial park development, targeted infrastructure investment, and enforcement of ESG and compliance standards, amplifies investment momentum across key sectors.

Key Manufacturing Sectors in Vietnam in 2025

1. Electronics and Semiconductors

Vietnam remains a global hub for electronics manufacturing. With giants like Samsung, Intel, and Foxconn expanding operations and chip-packaging investments by Hana Micron ($930 million) and Amkor ($1.6 billion) underway this sector is poised for continued growth. Electronics accounted for roughly $72.6 billion in exports in 2024. Government incentives promoting R&D and cleanroom development are embedding Vietnam deeper into the global semiconductor supply chain.

2. Textiles and Garments

Vietnam’s textile, garment, and footwear industries achieved combined exports of approximately US $71 billion in 2024. The country is the world’s third-largest footwear exporter, with the leather and footwear sector alone reaching US $27 billion. Preferential tariffs under the EVFTA and CPTPP, coupled with rising demand for ESG-compliant production from Western brands, are accelerating the adoption of green manufacturing practices across the sector. 

3. Furniture and Wood Products

As one of the world’s leading furniture exporters, Vietnam’s wooden goods sector thrives especially in industrial regions like Binh Duong and Dong Nai. With furniture export value reaching about $3.4 billion in 2024, demand for certified timber and sustainability practices continues to grow amid shifts in global sourcing preferences.

4. Automotive and Electric Vehicles (EVs)

A rapidly growing industry, Vietnam’s automotive sector is transitioning from CKD assembly toward EV production. Homegrown brand VinFast leads this shift. Meanwhile, partnerships with Korean and Japanese manufacturers are bolstered by FTA-driven tariff elimination, aiming to reduce cost and enhance export feasibility.

5. Food Processing and Agro-Manufacturing

Vietnam’s strength in seafood, coffee, spices, and rice provides a solid foundation. In 2025, agricultural processing is seeing a surge in modern packaging and ESG traceability investments, creating opportunities for mass exports in beverages, meat, and processed fruit.

6. Renewable Energy Equipment Manufacturing

Vietnam’s National Power Development Plan VIII prioritizes local production of solar panels, turbines, and green-tech components. Clean energy investors, including Lego opening a solar-powered toy factory in Binh Duong indicate growth in this strategic manufacturing area.

7. Pharmaceuticals and Medical Devices

With a growing demand driven by demographic trends and healthcare expansion, the local medical device and pharmaceutical manufacturing market is accelerating. Government incentives and partnerships with EU and Korean firms are reducing reliance on imports, underpinning industry growth.

Where Are the Manufacturing Hotspots in Vietnam?

Foreign manufacturers often target locations that optimize logistics, incentives, and labor supply. Key industrial hotspots include:

  • Binh Duong and Long An (Southern Region): Industrial powerhouses with close proximity to Ho Chi Minh City and major highways.
  • Bac Ninh and Hai Phong (Northern Region): Tech clusters, with Hai Phong’s Lach Huyen port and expressway connections to China.
  • Da Nang (Central Region): Emerging central hub, especially for light manufacturing and IT-linked sectors.

These areas benefit from robust infrastructure including modern seaports, upgraded expressways, industrial parks, and Special Economic Zones (SEZs). They also offer preferential policies and tax incentives for high-tech or export-oriented industries.

How Vietnam Compares to Other ASEAN Manufacturing Hubs

Vietnam continues to distinguish itself among peers such as Thailand, Indonesia, and Malaysia across several key dimensions:

  • Labor Costs: Vietnam maintains lower average wages than Thailand or Malaysia, providing a strong incentive for labor-intensive manufacturing.
  • FTA Access: With 15+ signed FTAs including CPTPP, EVFTA, and RCEP, Vietnam has deeper trade connectivity than most ASEAN neighbors.
  • ESG and IP Compliance: Vietnam has stepped up ESG reporting and enforcement of intellectual property rights, although gaps remain.
  • Supply Chain Integration: Vietnam has deepened its links with Korea, Japan, and ASEAN, especially post-RCEP, making it a preferred link in regional and global value chains.

These factors contribute to Vietnam’s rising profile as a strategic, cost-effective alternative or complement to other regional hubs.

Conclusion

Vietnam’s diversified manufacturing base and its integration into global supply chains make it a top-tier destination for foreign investment in 2025. However, successful entry requires nuanced understanding of the legal landscape within each sector—including regulatory compliance, ESG obligations, and advantages derived from free trade agreements (FTAs). 

At Corporate Counsels, part of Le & Tran, we support foreign manufacturers navigating Vietnam’s dynamic industrial landscape. Whether you are expanding into electronics, garments, renewable energy, or agro-processing, our Corporate Lawyers deliver strategic legal guidance across investment licensing, regulatory compliance, and ESG-aligned operations. Contact us at letran@corporatecounsels.vn to ensure your market entry is seamless and sector-aligned.