Vietnam: Is Apple setting up a $1b data hub in Danang?

Vietnam: Is Apple setting up a $1b data hub in Danang?

Danang, the central city of Vietnam, has been identified as the location for Apple’s $1 billion regional data centre, according to reports in local Vietnamese media, which cited speeches made by members of the city’s committee during a recent foreign direct investment (FDI) review session.

The link on this development on the city’s official portal is not accessible. But media reports cited this post titled ‘Danang improves capacity in attracting FDI’, and attributed it to be the source for their stories on Apple mulling the setting up of a data centre in the city’s central IT park or the Danang Hi-tech Park.

The development is related to DEALSTREETASIA’s earlier report that Apple was planning a $1 billion Asia-focused data centre in Vietnam. The location was then said to be the capital city Hanoi. But since then, Apple in its comments to Bloomberg had said that it had no plans for such a facility in the Southeast Asian nation.

Yet local media quoted Vietnamese authorities as reportedly saying that the American tech giant was examining the possibility of building an R&D facility in this central city, and the final decision would be taken after another visit by a group of Apple executives. These Apple executives are slated to visit Danang at the end of August, the reports added.

If these reports are true, this will be Apple’s second investment in Vietnam, following the opening of the Apple Vietnam LLC subsidiary that sells its iPhones and provides IT services.

Danang may be a great location for Apple’s R&D presence in Vietnam as the city “certainly has competitive advantages over other regions when it comes to doing business,” said Matthew Powell, director of Savills’ Hanoi office, the real estate service firm that has been doing business in this city for years, and had also recently launched an office there.

Danang has retained the top spot in the country’s so-called Provincial Competitiveness Index for three years in a row. “The city infrastructure has significantly improved. Its accessibility has also increased with direct flights to other business hubs such as Hong Kong, Singapore, Bangkok, Tokyo and Seoul. Most of all, the local government has implemented positive changes in the policies and procedures, facilitating investment flows to the city,” said Powell.

The ease of doing business offered by local policymakers has helped Danang attract 30 new FDI projects worth a total of $10 million in the first half of this fiscal alone. The newly licensed projects mainly include businesses in services, technology, electronics, precision engineering and logistics.

In terms of IT potential, Truong Gia Binh, chairman of Vietnam’s tech major FPT Corporation, which has also launched a comprehensive technology complex in the city, said: “Danang, with its own advantages of dynamic, openness and decisive leadership, coupled with a young workforce and the availability of infrastructure, is poised to become the IT hub of Vietnam.” The total sales of the IT industry in Danang last year hit over VND19 trillion ($852 million), a rise of 16 per cent year-on-year. The city also continued to lead in the country’s index for IT readiness.

In addition, Danang aims to become a startup city by 2020, having kicked off incentives to attract technology students and business, amid the context that Vietnam is being recognized by the international tech space thanks to the strengths known to come from Hanoi and Ho Chi Minh City, the two biggest cities. “Danang has a strong and transparent governance that is truly committed to developing the business community.

This is the image that Danang has built to attract startups,” Vo Duy Khuong, the city’s former vice chairman of the people’s committee, said at a recent meeting. An investment by a high profile company like Apple will certainly have a positive impact on the growth of Danang, according to Powell, who has seen an increasing number of international investors interested in setting up their businesses in the city. The $1 billion facility will join a host of international tech majors who have set up large projects in Vietnam. They include Samsung with a planned $300 million data hub in addition to its total $14 billion investment in the country, LG Electronics’ $1.5 billion complex in Hai Phong and Microsoft’s $302 million facility in Bac Ninh.

Source: DealStreetAsia