Hanwha Moves Global Manufacturing From China To Vietnam - Factory Visit Report

By Charles Rollet, Published Mar 05, 2019, 09:28am EST

In a Vietnamese industrial zone surrounded by rice fields and small countryside towns, Hanwha Techwin has started a factory that produces most of the millions of surveillance cameras it exports worldwide, a major move from its previous primary manufacturing in China.

The two images below show the nearby countryside:

While the next 2 images show the front of the factory:

Based on a $100 million investment, the factory is now a core part of Hanwha’s global expansion plans in the security sector, showing the growing shift of manufacturing from China to Vietnam, underscoring why many are considering moving there from China.

IPVM visited Hanwha’s factory in Bac Ninh province, northern Vietnam.  In this note, we examine why Hanwha moved manufacturing to Vietnam, how the cameras are built, and other factors, including:

  • Vietnam Export Advantages
  • Factory Size and Production
  • Low Labor Costs
  • Government Tax/Trade Advantages
  • Component Sourcing
  • HiSiliCon Use
  • Production Line
  • Expansion Plans

[Note, unlike typical industry factory visits, IPVM covered our own travel expenses and does not accept any advertisements, sponsorships, consulting, etc. We are interested in visiting other factories, though due to the Chinese government's blacklisting of IPVM, we will not be visiting China.]

Factory ******** ****** *** ******

*** ******* ** ******* in*** ** ********** ****, ***** * **-****** drive **** *****'* ************* airport *** * *-**** drive ** **** *********** *** ***** ********* port ** ********. **** is ********** ***** **% of *** *******'* ******* are ******** *** *** and **% ** ***, Hanwha ****.

*** ** ** ** the ****** ** ** emerging "********** *******" ** ******** *******'**** ***** *****, * ******* ********* swath ** **** (** million ******) ********** ******* thickly-jungled ********* ** *** west *** *** ******* Ocean ** *** ****. The ****** *** ***** much ** *******'* *************. Samsung's***** ******* ********** ** **** ** the *** ** *** Hanwha *****, *** ** two ******* ********* ** the **** ***** ******* **** ** *** company's ****** *********:

*** ****** *******’* **** leader *** ************** *** finance, ***** **** ***, told ****:

** ***** **** ** the **** ********. ** consider ** * ********* hub.

*** ******* ******* *** produces **** **% ** all ******’* ******* *********. While ****** **** **** there **** ** ***** for **** ********** ** increase, ** ***** ** so "*********" ************ *** to *** ******** ** North ******* ***** (*.*.,****** **** ************ ***** grew **%** ***** ******* ** 2018).

***% ** *** ******* built ** *** ****** factory *** ******** ******, mostly ** ******, ***** America, *** ********* ****. None *** **** ** Vietnam. *** **** ** Hanwha’s ************ ********* ********** is ***** ******* ***** Korea *** *****. *** cameras ******* ** *** US *** **** ** Vietnam, ****** ****** ******** *******,***** *** **** ** South *****, ****** **** IPVM.

Size & ********** ********

*** **** ******* ******** is ***** ***,*** ****** feet ** ***** **** and ******* *** ******* (all **********, ****** *** 8 ****** ********). ** is *****, *** ******* in **** ** ***** factories ** *** ********** zone, **** ** *****'* ******* *******. *** ****** ******* ***** is *** ****** -**,*** ******* *** **** * ******* square ****. [**** ** longer *********]

*** ****** ******* *** a ****** ******** ** 2.75 ******* *******, ***** said. ***** ***, *******, it ** **** ********* about ***,*** ******* * month, ** ******** **** than * ******* * year.

(****: ******'* ******* ****** that *** ******* ******** about*.* ******* ************** ********, **** ***** of ********** **** ****** to* *******).

Advantages ** ********* ** *******

****** **** **** ** a ****** ** ********** to ********* ** *******:

  • Labor *****. This is the main reason behind Hanwha's Vietnam operations, Hanwha managers told IPVM: Vietnam’s labor costs are only ***** */* ** *****’*. IPVM asked for an average salary but Hanwha managers declined to give specifics. Online, however, Vietnamese ************ ******* ******** ******* base ******** *** ******** line ******* *** ** the$200-$300 *****. (Vietnam's national minimum monthly wage is *********$**;*****'* ******* ****, ***** ** *** at *** ********** *****, ranges **** $*** ** $330.)
  • Tax **********. Vietnam’s government is exceptionally keen on bringing in foreign investment, particularly in the tech sector – Hanwha’s CEO **** *** *******’* ***** minister. ** ** ****** Producing **********, ** ***, Hanwha ******** *************: *** factory ****no ********* *** ** *** ***** *** ***** of operation and only 10% *** (i.e. half the ***** **** ** **%) *** *** ****four *****. This is a better deal **** ** *****,***** ****-**** *********** *** also ******** *** *two-year *** *******, but pay a 12.5% *** (i.e. half the usual rate of 25%) for the next three *****.
  • Trade **********. As an EPE, Hanwha Techwin also benefits from the Vietnamese government charging zero ****** ** *** ******* ** *******, Hanwha said. This is especially important since about half of the components used to make cameras in Vietnam are imported from Japan, Taiwan, Korea, and China.
  • No ***** ***. US tariffs on Hanwha’s Vietnamese cameras currently stand at only 2%, Young said. Had they been made in China that number would be 10.5%, and could possibly increase to 25% if a ***** ******** ***** ***’* *******.
  • Good *********. Vietnam has a **** ******** ****** **% ******** ********* ******. “*** ********* ***** is ********** ****** *** very ******** *** ***********,” Young **** ****.

******** ****** **** **** it *** *********** "** negative *******" ** ********* in *******, ****** **** been ********. *** *******,******-*******, * *****-******* ************* business *** ****,****** ****:

******* ** **** **** open *** ********, *** it *** ****** ** “busy” ** ** **** fronts **** **** ***** can ** ***** ****.

*** ******* ******* ** Chinese ***** ******* ******* ********* ***** ******* (**** is ***** ** '*************') also ******* * ***** *******, ********* to ******-*******.

Impact ** ****** **** *****

****** **** ** ******* many ******-******** ******* ** Tianjin, *****, *** **** has *** ******* ** Vietnam. **** ***** ** there **** *** ******** consequences **** *** ******* government ** ******** **** shift, ******* ****** **** there *** **** ****. This ** ******* ******* Hanwha ********* *** ******* in *****, ******* ** China’s ******** ******.

"** ****’* ***** *****, we ******* ** ***** [for *** ***** ******], we **** *** ***** there. ** **** *********** here [*******] ** ****** globally,” ***** ****.

**** - ******* ****, Hanwha's ***** ************ ****** share ** ***** ** tiny: "**** ****" **** than *%, ****** **** IPVM, ******* *** ** the ********* ** ******** Chinese ******** ****** *****.

Components **** ******* *********

******’* ******* ******* ******* about **** ** *** components ****. **** ** the **** ******** ********** components, **** *****, **** from *****, ***** *****, and ******; ****** ******* and **** ***** ********** are ******* ***** **-** from ******* *** ***** respectively.

“**’** ****** ** ****** more *** **** [** our ********] ** *******,” Young ****.

*** ** *** ******** components *** ******* **** import **** ***** *** HiSilicon *****. ****** **** IPVM ***** **** **** only *** ***-*** *******, specifically******’* * (*** “*******”) series. * ******* ***** in ******’* ********** **** touted ***** ******* ** an “**********” ******* **** “saving **** ************ ***** and ****”.

********* ***** **** ****** an ***** *** ** HiSilicon’s ****** *******, ******,***** ****** **** ******* purchases** ** ***********. ************* ******* ** ******** inform *** ***** ***** of ***** ******* **** HiSilicon *****, ****** ******* ****** ***** **** ***** the *********** ************ *** NDAA *** ********. ******’* Q ****** *********** ** *** **.

*** **** ** *********, see********* ***** ** ****** HiSilicon ** ****** ************** ********* ******* ******** Tens ** ******** ** Western *** *******.

Factory ****

**** *** ***, * member ** *** *******'* technology ****, ****** **** around *** ******* *****. (Hanwha *** *** ***** IPVM ** **** ******, citing ***** ******* ********.)

PCB ****

*** *******'* ****** ********** consists ******** ** *** huge *****: *** *****, with ***** ** *******, is ***** *** **** (printed ******* ******) *** the ******** ******* *** made. *** ****** ****, with ***** *** *******, is ***** *** ******* are *********, ******, *** packaged.

**** ***** *** ******, air-conditioned, *** ********** ***** - **** ****** *** required ** *****.

*** ****** ********* *** room *** ***** * dozen ******-********, ******-***** ******** where **** *** *******/********, then ******* *** ***** using ** **-******* ******. The ******* ***** ** largely *********. *** ** the *******'* ******** *** Hanwha-made ** *****, **** said:

**** ** [*****] **** factory ** ******* *** own *********. ** ****** all ********* ** ******

Assembly ****

*** ******** **** ** louder *** ******. *****'* a ******** ***** ** workers ****** **********-*** '****' to **** *** ****** parts. **** **** ** divided **** ****** ** workstations **** *-* ******* each. *** ************ *** littered **** ****** *****, boxes, *** ******** *******.

***** ******* *** ****** with ********** *** ***, casing, ****, *** ***** camera ***** **** *** unit *** **** ******* the ****** *** ********. The ******* ** **** by ******** ****** *** camera ** *****-***-***** ********-***** targets ***** ***** **** workstation, ***** ** ********* system ********* ** * computer ****** ******* ******* focusing ** ******. *** final ******* ** **** packaged *** ********.

***** **** ******, **** said **** ********** ****** in *** ******** **** can ******* ** ** 50 ******* *** ***. A ***** ****** ** the **** ****** ** Vietnamese *** ****** *******: "HANWHA *******: ** ****** PRODUCT".

No ******, '***********' *********

*** ********/********* ******* ** the ****** ******* *** not ****** ** ******* robots, *** ****** *** not **** *** ** mention ****** ****** *** tour.

**** ****** ** ******** to *********, ***** *********** * ********* ************ **** *** ******** factory **** "**** ***" Hikvision-made ******, ******** **** improved ********** ** **% and ******* ***** ***** by **%.

*** ********* ***** ***** "intelligent" ****** ************* ****** pallets, ******** ***** ** an ******** ****, ****** finished ***** ** *** warehouse, **** ****-********. **** of **** ***** ** seen ** *** ****** Vietnam ******* ****** ** do *** **** *********** reports ***** *** **** such ****** *** ***** used ** ********** ** Hikvision.

***** ****** *************** ********** ******, *********'* ********************* ******* * ******* ***** on'*****' ********* *********,********** *** ****-******* ******.

**********

***** *** ****** ******* from *** ********** ********** and *** **** ** significant ***** ******** ******* Vietnam *** *** ***, the ******* ***** *** cost-competitive ******* *** ** compared ** ***** *** manufacturing.

** ******* ** ** seen, *******, ******* *** move-to-Vietnam ***** ******* ****** Hanwha ** ***** ************, particularly **** ******** ****** already ************* ** *****.

Comments (18)

Note: We will also be doing a visit and post on Avigilon's USA factory next month.

Also, Charles is based in Southeast Asian so can do visits in that region.

Agree
Disagree
Informative: 14
Unhelpful
Funny

Sounds like the start of a great series!

Agree: 6
Disagree
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Funny

Another factory move, Arecont announced moving their USA manufacturing from their longstanding Glendale office complex to Duarte, California. We spoke with Arecont and they confirmed they will still be manufacturing in the USA. We are planning a visit later in the year.

Agree
Disagree
Informative: 2
Unhelpful
Funny

Very interesting article.

Does Hanwha have any non-camera manufacturing plants in Vietnam? 

Agree
Disagree
Informative
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Funny

Hi Brandon, good question. Hanwha says it's invested $1 billion in Vietnam so far, including two manufacturing plants: the security camera factory and an aircraft engine factory, also near Hanoi. Hanwha has other investments in Vietnam like a solar power plant and an insurance office.

If you were asking whether Hanwha produces non-camera surveillance products like NVRs in Vietnam, I think they do but I'm not 100% sure. I've followed up with Hanwha and will update when they respond.

Agree: 1
Disagree
Informative: 2
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Funny

Update: all Hanwha Techwin DVRs/NVRs are made in Vietnam, Hanwha told me in an email.

Agree
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Informative: 2
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Funny

Second update: actually, by "all" Hanwha means commercial B2B NVRs/DVRs being sold in the US. The company still manufactures some consumer DVR/NVRs in China.

Agree
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Informative
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Funny

Related, this topic (B2C vs B2B products) came up here. Details from Hanwha:

None of B2B NVRs (S/P/Q/X/T) and none of B2B DVR (SRD/HRD) is ODM or OEM of Raysharp. I can confirm we will not use Raysharp in the future either.

A few B2C AIO models are from Raysharp, but it is mostly being sold in the club such as Sam’s, Costco. Different channel, policy, sales strategy from professional B2B business.

Agree
Disagree
Informative: 1
Unhelpful
Funny

Seems like Hanwha is a multination giant as large as Motorola and Canon.

Agree: 5
Disagree
Informative: 2
Unhelpful
Funny

Hanwha is much bigger than Motorola Solutions but Motorola has a much better-known brand in the West

Hanwha's Fortune 500 profile lists ~$45 billion annual revenue. Motorola Solutions revenue is ~$6 billion USD (of course, post spinoff of the mobile phone division).

Agree
Disagree
Informative: 4
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Funny

Hanwha is a very large conglomerate. I recently visited their booth at the IDEX defense exhibition in the UAE where they had tanks/armored vehicles, etc. Different division than Hanwha-Techwin though. 

Agree
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Informative
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Funny

Very Interesting, also informative on the trade scenario in Vietnam. Thanks :)

Agree: 2
Disagree
Informative: 1
Unhelpful
Funny

Hanwha checks a lot of boxes. Quality competes with Axis, price competes with the ChiComs, and they aren't using questionable labor practices to manufacture.

Agree: 6
Disagree: 5
Informative
Unhelpful
Funny

They manufacture in a communist country , ruled by a corrupt regime of a one party dictatorship paying 300 USD a month..

notquestionable at all :)

Agree: 5
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Informative
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Funny

Interesting because I didn't know they were made in Vietnam.  Nice piece.  

Agree
Disagree
Informative: 3
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Funny

Note: I changed the title to "Hanwha Moves Global Manufacturing From China To Vietnam - Factory Visit Report"

I realize that many in the industry were not even aware of what Hanwha was doing in Vietnam and while we had read earlier news reports of the move, this is the first we are covering it.

Agree
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Informative: 2
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Interesting read. I believe Sierra Wireless are also relocating a factory from China to Vietnam.

Agree
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Informative: 4
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Hanwha has released a marketing video with shots from the factory, embedded below:

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Informative: 2
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