Due to COVID-19 and lockdown in Chinese factories, it can be seen that there have been an increasing number of Japanese companies intending to choose Vietnam is the new location for setting a supply chain for manufacturing industry.
Releasing the list, the Japan External Trade Organization (Jetro) said six of the 15 were large firms and the remaining nine were small and medium-sized enterprises (SMEs). One of them, the Hoya Corporation, which produces hard-drive components, is expected to move to both Vietnam and Laos. Another company is Toba Inc which has established a wholly owned subsidiary in Vietnam in anticipation that more Japanese manufacturers will invest in its rapidly growing economy as they move out of China.
The reason which can be explained is that Vietnam have been rising as a promising environment for lower labor costs and supply-chain diversification. Nintendo Co., maker of video games and consoles, began redirecting output of its Switch game player to Vietnam in recent months to hedge risks, according to a spokesman.