Wintek picks Vietnam for panel plant on lower labor costs

Wintek Corp., a Taiwanese maker of panels for Apple Inc.’s iPhones, plans to invest as much as $150 million on a new plant in Vietnam to take advantage of lower labor costs in the Southeast Asian country.

The shares of Wintek climbed 1.8 percent to NT$51.70 at the 1:30 p.m. close of trading in Taipei, the biggest gain since March 18. The panel maker plans to invest $100 million to $150 million on the plant in northern Vietnam’s Bac Giang province, Jay Huang, a spokesman for Taichung, Taiwan-based Wintek said by phone today.

Wintek told the Bac Giang Industrial Zones Authority that it will make touch panels for iPhones and iPads, according to Nguyen Van Hien, the authority’s chief administrator. Huang declined to confirm or deny whether the products would be used in the Apple devices.

“There’s no question this is great news for Vietnam and great for the Vietnamese economy,” said Than Trong Phuc, managing director of Ho Chi Minh City-based DFJ Vinacapital L.P., a technology investment fund. “Multinational companies are looking for a second country to China where they can diversify their investments and save on costs.”

The Wintek investment will add to the projects of other technology companies in Vietnam including Nokia Oyj, Intel Corp. and Canon Inc. Nokia said this month it plans to open a plant with an initial investment of 200 million euros ($283 million) at a site near Hanoi to make low-end mobile phones.

‘Moving Up’

“The next step you will see is Vietnam moving up the chain with products that have added value,” Phuc said.

Labor costs in Vietnam are one-third to 40 percent of those in China, according to Huang. Wintek’s wage expenses are less than 10 percent of revenue, he said. Vietnam’s improving infrastructure was another factor in the company’s decision.

“The major factor in us choosing Vietnam is to reduce labor costs as compared to China,” Huang said. “We have relatively high capacity in China, which we’ll continue to use for R&D and high-end manufacturing.”

Wintek received approval from local authorities to invest as much as $200 million in the past two weeks and expects to begin manufacturing as early as the third quarter, he said.

The plant will have an initial capacity to produce 10 million thin-film transistor modules a month, and “several million” touch-panel modules, he said. – Bloomberg News

Tags: Wintek, Wintek Vietnam