From China to Vietnam and Beyond: The Global Manufacturing Landscape Is Changing

The dynamics of global manufacturing are shifting. For many years, China was the go-to destination for contract production in Asia due to its vast labor pool, abundant raw materials, and established logistics ecosystem. Now, as trade policy between China and the United States continues to evolve, both countries are investigating new opportunities. It’s a prospect with the potential to shake up global manufacturing as we know it.

One country has emerged as a key player in this transformation: Vietnam. In September 2023, the country served as a meeting place for President Joe Biden and some of the world’s most prolific companies. It’s a sign of change to come for where and how global manufacturing contracts are fulfilled in 2024 and onward.

Vietnam: an emerging manufacturing hub

Vietnam has been actively courting semiconductor and advanced electronics manufacturing, successfully attracting some of the world’s largest corporations. Chip-packaging producer Amkor, for example, announced a $1.6 billion factory in Vietnam in October, marking its largest facility to date. In September 2022, Google announced plans to produce its Pixel smartphones in Vietnam.

Vietnam has rapidly grown over the past few years, entering a prime production economy model. Its population is nearing 100 million, with roughly a third of laboring adults employed in industrial or construction sectors. The country has a growing GDP of $410 billion, and it’s now poised to have its manufacturing sector account for 30% of GDP by 2030.

Countries around the world are taking note. Foreign direct investment in Vietnam surged 54% above the prior year in October 2023, reaching $15.3 billion, with nearly 75% of that investment focused on processing and manufacturing.

Growing opportunities for contract manufacturing

Vietnam isn’t the only up-and-coming country disrupting the global manufacturing landscape. Countries like Mexico and India are also on the rise for similar reasons.

Mexico’s strategic proximity to the United States — coupled with its skilled workforce and established supply chains — has made it a preferred choice for industries like automotive, aerospace, and electronics. Additionally, Mexico benefits from various trade agreements, such as the United States-Mexico-Canada Agreement (USMCA), which further enhances its appeal to international manufacturers.

Meanwhile, India, with its vast labor force, expanding infrastructure, and a growing consumer market, is increasingly becoming a hub for various industries, including pharmaceuticals, information technology, and automotive components. Most notably this year, Apple has chosen India’s manufacturing capabilities for production of the iPhone 15.

The great global manufacturing shakeup

These decisions to transition contract manufacturing out of China and into multiple global production hubs are catalyzing a paradigm shift. The evolving trade policies between China and the United States — plus the pursuit of cost-effectiveness, diversified supply chains, and access to growing consumer markets — necessitate transformation that could redefine global manufacturing far into the future.

Domestic manufacturing is on the rise! If you’re gearing up to win contracts and ramp up production here at home, make sure your equipment is ready to keep pace with business. You can always count on the professionals at Global Electronic Services. Contact us for all your industrial electronic, servo motor, AC and DC motor, hydraulic, and pneumatic needs — and don’t forget to like and follow us on Facebook!
Call for Help