The Metamorphosis of Vietnamese Industry

No longer simply a hub for low-cost labor, the nation's industry is aggressively pivoting toward quality, high-tech innovation, and sustainability. To provide a panoramic view of this transition and insights into the 2026 outlook, Business Forum Magazine sat down with Ms. Phan Cuu Chi, Manager of Industrial Services, Savills Vietnam.

- Which macro factors are driving the transformation of Viet Nam’s industrial sector from a quantity-based growth model to one focused on scaling up and enhancing quality? 

Viet Nam’s industrial sector is entering a comprehensive transformation from a labour-intensive growth model to one driven by quality, technology, and international standards. Four key macro drivers are supporting this transition. 

First, the Government’s consistent policy direction in attracting high-quality FDI and promoting high-value-added industrial development. The country currently has a network of 17 free trade agreements (FTAs), covering 200 markets. New-generation FTAs such as the CPTPP, EVFTA, RCEP, and most recently the Vietnam–UAE Comprehensive Economic Partnership Agreement (2024) have created a foundation for deep global integration and encouraged production upgrades aligned with international standards. 

Second, major investments in transport and logistics infrastructure, especially around industrial growth hubs. In the South, Long Thanh International Airport, combined with Ring Roads 3 and 4 and the Bien Hoa – Vung Tau Expressway, will reshape the region’s logistical landscape. In the North, multimodal connectivity is expanding rapidly through Lach Huyen Port, the Thai Binh – Hai Phong route, and the Hanoi – Hai Phong corridor, forming a crucial foundation for large-scale industrial clusters. 

Third, the Government is accelerating the implementation of green industrial planning, aiming for emission reduction, energy circularity, and sustainable production. Commitments made at COP26, Resolution 68 on sustainable development, and Power Development Plan VIII are strong signals that help attract high-tech investors who require stringent ESG standards. 

Finally, the global overview, with tariff changes, geopolitical uncertainties, and supply chain shifts, has created significant opportunities for Viet Nam. Flexible and stable foreign policy, along with deeper international cooperation, especially the upgraded trade relations with the United States, has strengthened the confidence of multinational corporations. Viet Nam is emerging as a strategic destination in the China1 strategy and in global supply chain diversification. 

Collectively, all four of these factors form a pivotal period of restructuring, elevating Viet Nam’s industrial sector to a higher position in the value chain. 

- Could you elaborate on the role of FDI in Viet Nam’s new phase of industrialisation, particularly in high-value sectors such as electronics and technology? 

Looking back at Viet Nam’s industrialisation journey, FDI has been the defining catalyst, moving the country from an agricultural base to one of Asia’s key manufacturing hubs. Today, it continues to act as the main engine of progress across three levels. 

FDI introduces advanced technologies and operating models. Companies like Samsung, LG, Foxconn, Amkor, and BYD not only commit capital but also establish tier-1 and tier-2 supply ecosystems, lifting the domestic technology landscape to a higher standard and supporting the growth of electronics, semiconductors, and smart device industries. 

FDI also accelerates the standardisation of production according to international benchmarks. Requirements related to quality management, ESG, cleanroom standards, automation, and traceability compel Vietnamese enterprises to transform their production

models, from pure outsourcing to deeper participation in the value chain. 

Furthermore, the spillover effects of FDI help develop a highly skilled technical workforce, expand R&D activities, and encourage innovation, fostering the growth of high-quality local supporting industries, increasing localisation, one of the Government’s key priorities. 

- With the growing emphasis on “green” and sustainable requirements, how do you think eco-industrial parks will contribute to attracting investment and developing high-quality industries in Viet Nam?

Eco-industrial parks (Eco-IPs) are no longer a trend but a mandatory requirement, and they are becoming a crucial element in Viet Nam’s strategy to attract high-quality FDI.

The theme for the Vietnam Autumn Economic Forum 2025 was ‘Green Transformation in the Digital Era’, reinforcing the country’s choice of a sustainable, technology-driven, and carbon-neutral growth model for the upcoming decade. 

Eco-IPs play three main roles: 

Attract strategic investors, particularly those in high technology, electronics, smart devices, and green logistics. Large FDI projects increasingly require infrastructure for renewable energy, circular wastewater systems, carbon management, and green production models. 

Elevate industrial standards by shifting the market from labour-intensive production to smarter, higher-quality manufacturing. 

Create long-term competitive advantages as global ESG standards transition into mandatory requirements from 2030. 

Notably, in December 2025, three major IPs (Long Đức 3, Bàu Cạn, Tân Hiệp, and Xuân Quế – Sông Nhạn) will break ground, serving as verified evidence of strategic momentum towards large-scale, green industrial development and the anticipation of incoming high-tech investment capital. 

- In 2026, what major shifts do you forecast for Viet Nam’s industrial investment and development? What factors could influence or alter these growth drivers? 

The strength of 2025 sets the stage for what comes next. Registered FDI reached US$33.7 billion in the first 11 months, with disbursement increasing 7.4% YoY to US$23.6 billion. Manufacturing and processing represented 57.5% of total inflows, and Q3 recorded more than 1,200 new and expanded projects. This solid performance positions Viet Nam for notable shifts in 2026.

Moving into 2026, we forecast three major shifts: acceleration, expansion, and logistical upgrades. 

• One: High-tech FDI will accelerate. Viet Nam continues to build a reputation as a cost-efficient, skilled, and politically stable destination within regional supply chains. Sectors such as electronics, smart devices, data centres, AI equipment, and semiconductors will continue to grow. 
• Two: Large-scale, green industrial parks will expand. From 2026, new IPs must meet technical, environmental, and renewable-energy criteria aligned with the national green transition roadmap. Provinces including Đồng Nai, Bình Thuận, Tây Ninh, Hải Phòng, and Quảng Ninh are predicted to become new industrial hotspots. 
• Three: Logistical infrastructure will see significant upgrades. Key projects, Long Thành Airport, HCMC Ring Road 3, the Khánh Hòa–Buôn Ma Thuột Expressway, and the expansion of the Cái Mép–Thị Vải port cluster, will help reduce logistics costs by 5–7% and strengthen import–export capacity. 

However, these growth drivers may be affected by several constraints, including complex legal procedures, a shortage of skilled labour (only 28.3% of workers are technically trained), and limited clean industrial land in mature provinces where occupancy already exceeds 90%.  

- How does the development of infrastructure (i.e. Cái Mép–Thị Vải Port, the Free Trade Zone in Hải Phòng) and inter-regional transport networks impact the operational efficiency of Viet Nam’s industrial sectors, especially amid increasing logistics requirements? 

The seaport system and inter-regional transport networks are the “backbone” of modern industry. Cái Mép–Thị Vải Port is one of the few ports capable of accommodating large-capacity vessels, helping reduce dependence on international transhipment and significantly shortening transport time and costs. 

When combined with the Hải Phòng Free Trade Zone and newly built expressway networks, Viet Nam can establish strong logistic-industrial triangles in the North, Central, and South. 

High-quality infrastructure enables businesses to: 
• reduce logistics costs and increase delivery speed, 
• expand production scale and facilitate exports, 
• attract high-quality FDI due to efficient supply chains. 

Amid intensifying regional competition, Viet Nam is entering a golden era as FDI flows are no longer driven solely by cost advantages but increasingly by efficiency, technology, and sustainability. With synchronised planning, streamlined investment procedures, and strong workforce development, Viet Nam can become one of Asia’s leading manufacturing and logistics hubs in the coming decade. 

Savills Vietnam remains committed to supporting the Government, ministries, and the business community, not only as a consultant, but also as a bridge connecting policies, investors, and the market during this crucial phase.

Thank you so much!