Korean firm plans factory that alone could meet half US demand
HANOI/SEOUL – Korean and Chinese magnet firms, including an Apple supplier, are set to open factories in Vietnam, according to documents and people familiar with the plans, amid a push to diversify supply chains away from China and defend against Sino-US tension.
Still, Vietnam produces just 1 per cent of the world's magnets, showed Adamas Intelligence data cited in a US Department of Energy report, compared with China's 92pc. Magnet makers are also drawn to Vietnam by low labour costs and market access afforded by multiple free-trade deals. They also want to move closer to Vietnam-based clients, such as automakers and electronics firms, which are increasingly wary of over-reliance on Chinese supplies as relations worsen between Washington and Beijing, industry insiders said.
However, "anyone who is trying to build from scratch a mine-to-magnet supply chain is going to face a lot of challenges," said David Merriman of Project Blue.SGI, which supplies magnets to Vietnamese EV maker VinFast and Korea's Hyundai Motor, told Reuters it is investing $80 million in its new Vietnam factory with production starting in 2024.
"China's policy on control of rare earths-related raw materials and technology is being strengthened, resulting in supply uncertainty," SGI said.