Industrial Zone Hub: The North and the South

Vietnam is quickly becoming a leading industrial and manufacturing hub in Asia, thanks to its strategic location, low labor costs, and strong FDI inflows. The country is a key part of global supply chains, especially in electronics, textiles, and furniture.

Industrial zones (IZs) have played a central role in this growth, offering ready infrastructure, tax incentives, and a supportive business environment. They help attract investors and boost production efficiency.

While Northern Vietnam is rising as a powerhouse for high-tech and electronics manufacturing, the Southern region remains the country’s traditional base for light industries, logistics, and consumer goods. By examining their strengths, infrastructure, labor profiles, and strategic advantages, this analysis aims to help investors determine which region aligns best with their business goals.

Cau Kien IP in Hai Phong. (Source: Thai Nguyen Portal)

National Overview of Vietnam’s Industrial Zones

Vietnam has over 400 industrial zones (IZs) planned nationwide, with more than 290 in operation and an average occupancy rate of 80–85%. These zones host a wide range of sectors, including electronics, textiles, furniture, automotive parts, and food processing, with a growing focus on high-tech and green industries.

The government actively supports industrial development through land-use planning, tax incentives, and infrastructure investment. Strategic initiatives, such as expanding expressways, deep-sea ports, and international airports, aim to improve logistics and regional connectivity.

Labor availability is another advantage, with a young, trainable workforce spread across the country. Vietnam’s IZs continue to evolve as the government pushes for sustainable growth, value-added production, and the development of smart and eco-industrial parks.

The North: Emerging Manufacturing Powerhouse

Northern Vietnam is rapidly positioning itself as a dynamic manufacturing base, driven by its strategic location, infrastructure upgrades, and growing presence of global tech giants.

Key provinces such as Hanoi, Bac Ninh, Hai Phong, Hung Yen, Quang Ninh, and Vinh Phuc are central to this transformation. The region has attracted major corporations like Samsung, Foxconn, Luxshare, and Canon, making it a hub for electronics and high-tech manufacturing.

City / Province	Major Industrial Zones
Bac Giang	Hoa Phu, Quang Chau, Van Trung
Bac Ninh	Thuan Thanh, Tien Son, VSIP, Yen Phong
Ha Noi	Noi Bai, Phu Nghia, Sai Dong B, Thang Long
Hai Duong	Dai An, Nam Sach, Phuc Dien, Tan Truong
Hai Phong	Deep C, Dinh Vu, Nam Dinh Vu, Noroma, VSIP
Hung Yen	Pho Noi A, Yen My 1, Yen My 2

A major advantage of the North is its proximity to China, facilitating the easy movement of raw materials and components via land borders and expressways. The Lach Huyen deep-sea port in Hai Phong, along with Dinh Vu and Nam Dinh Vu, strengthens export logistics to global markets.

Several notable industrial zones have contributed to the region’s rise, including:

• VSIP Bac Ninh – a model IZ attracting tech investors

• DEEP C Hai Phong – located near port and airport infrastructure

• Thang Long Industrial Park (Hanoi & Vinh Phuc) – home to Japanese and Korean manufacturers

Northern provinces also benefit from a strong workforce pipeline, supported by universities and vocational schools in Hanoi, Bac Ninh, and Hai Phong. This ensures a steady supply of skilled labor, particularly in electronics and precision engineering.

Continued investment in infrastructure, such as the Noi Bai–Lao Cai expressway, and future projects like the North–South high-speed railway, are further enhancing the region’s appeal. The North is not only a cost-effective location but also one that offers increasing logistics efficiency and connectivity for export-oriented industries.

The South: Vietnam’s Traditional Industrial Base

Southern Vietnam has long been the country’s industrial heartland, with well-developed infrastructure, a large labor pool, and a broad mix of manufacturing sectors. Key provinces in the region include Ho Chi Minh City (HCMC), Binh Duong, Dong Nai, Long An, and Ba Ria–Vung Tau.

City / Province	Major Industrial Zones
Ba Ria - Vung Tau	Cai Mep, My Xuan B1, Phu My 3
Binh Duong	Bau Bang, Binh An, Binh Duong, Song Than, VSIP
Dong Nai	Amata, Giang Dien, Long Thanh, Nhon Trach 3
Ho Chi Minh City	Hiep Phuoc, Le Minh Xuan, Tan Binh, Tan Phu Trung
Long An	Dong Nam A, Phu An Thanh, Tan Duc, Viet Phat

The South’s core strength lies in its diversified industrial base, which spans textiles and garments, furniture, fast-moving consumer goods (FMCG), packaging, and logistics. This diversity helps businesses scale quickly and adapt to shifting market demands.

An established support ecosystem has grown around these industries, including reliable supply chains, logistics firms, industrial services, and skilled labor. Many global and regional manufacturers have built long-term operations in this region thanks to its strong business environment.

Southern Vietnam also benefits from critical port infrastructure, including:

• Cat Lai Port – the busiest container port in Vietnam, near HCMC

• Cai Mep–Thi Vai Port – a deep-sea port in Ba Ria–Vung Tau capable of handling large international vessels

Prominent industrial zones include:

• VSIP Binh Duong – one of the country’s most successful industrial parks

• Amata City Dong Nai – home to global manufacturers across various sectors

• Long Hau IP (Long An) – serving SMEs and export-oriented enterprises

The region’s proximity to Ho Chi Minh City – Vietnam’s financial and commercial center – offers unmatched access to banks, services, and international business networks. This connectivity makes the South especially attractive for companies targeting both domestic consumption and global exports.

North vs. South: Comparative Analysis

Aspect	North	South
Key provinces / hubs	Bac Ninh, Bac Giang, Hai Phong, Quang Ninh, Hung Yen, Vinh Phuc	Binh Duong, Dong Nai, Long An, Ba Ria–Vung Tau, HCMC
Typical industries	Electronics, precision components, high-tech assembly, some auto suppliers	Garments, plastics, food processing, heavy/light manufacturing, logistics & warehousing
Logistics strengths	Growing deep-water ports (Lach Huyen / Hai Phong), good road/rail links to China; strong upstream electronics supply chain.	Closest to major southern ports (Cai Mep, Cat Lai), large logistics networks, proximity to HCMC consumer & services market.
Land supply & pipeline	Rapid pipeline growth, supply expanding (tens of thousands ha planned) but hotspots tight; major FDI in electronics.	Large accumulated stock in southern hubs (Binh Duong/Dong Nai lead market share); new approvals continue.
Occupancy / demand	Strong demand (high occupancy in core northern hubs).	Very strong in prime southern parks, some provinces showing higher occupancy and absorption.
Costs (land / rent)	Competitive but rising in core clusters (electronics clusters push prices up).	Generally higher around HCMC core but more variety (nearby provinces cheaper); rents influenced by logistics/access.
Investment drivers	FDI in electronics (Samsung, Foxconn/partners), proximity to China supply chain.	Logistics-driven exports, supporting large assembly/packaging operations and SMEs.
Challenges	Infrastructure bottlenecks in some corridors, environmental & land-clearance timelines.	Traffic congestion around HCMC, land scarcity close to city, rising wages pushing firms outward.

When evaluating industrial zones in Vietnam, investors should consider not only location and infrastructure but also the cost of land and facilities. Rental prices vary significantly between the North and the South, reflecting differences in demand, connectivity, and available supply. The table below provides an overview of current industrial land and factory rental rates to support informed site selection and budgeting.

Region	Average Rent (industrial land, per m² per full lease-cycle / remaining lease term)	Prime / Tier-1 Locations	Notes
North	US$ ~ 135-140 / m²	Bac Ninh, Hai Phong, Vinh Phuc etc.: up to US$ 180 / m² in the best parks.	Prices have been rising (≈ 30-35 % YoY in some areas). North still cheaper than South for prime locations on average.
South	US$ ~ 175‐190 / m² in many key parks for the full lease-cycle term.	Ho Chi Minh City: up to US$ 280-300 / m² in prime industrial land (very high standard, good infrastructure, close to ports/transport hubs).	High demand + limited availability, especially near HCMC and neighbouring provinces (Bình Dương, Long An, Đồng Nai).

Future Trends and Developments

Vietnam’s industrial landscape is evolving with a focus on smart and sustainable growth. New smart industrial parks like VSIP 3 (Binh Duong) and eco-industrial zones such as DEEP C (Hai Phong) are incorporating green energy and digital management to attract high-tech investors.

To ease pressure on major hubs, the government is promoting industrial expansion into Tier 2 provinces—such as Thai Binh in the North and Tay Ninh in the South, offering lower land costs and improving infrastructure.

Incentives for high-tech, clean, and export-oriented industries remain strong, while land shortages in traditional zones are shifting investor interest toward emerging areas.

Both regions are climbing the value chain: the North is advancing in electronics and precision manufacturing, while the South is moving into automation, logistics, and R&D support, reflecting Vietnam’s long-term strategy for quality-led industrial development.

Strategic Considerations for Investors

With both the North and South offering distinct advantages, choosing the right region depends on business priorities.

• For companies targeting export markets, especially in electronics or high-tech sectors, the North offers proximity to China, skilled labor, and improving logistics.

• The South suits firms producing consumer goods, furniture, textiles, or FMCG, thanks to its mature infrastructure, domestic market access, and deep talent pool.

Investors should also assess:

• Product type and its logistical requirements (e.g., bulky goods vs. high-value electronics)

• Supplier networks, which are more established in the South

• Labor availability and cost, with the North often offering slightly lower wages

A hybrid model is increasingly popular: manufacturing in the North to leverage cost and China border access, and distributing from the South via major ports like Cai Mep–Thi Vai to reach global or regional markets efficiently.

Aligning location with supply chain needs and long-term growth plans will be key to success in Vietnam’s evolving industrial landscape.

Conclusion

Northern and Southern Vietnam each offer unique strengths. The North excels in high-tech manufacturing and border trade advantages, while the South boasts diversified industries, mature infrastructure, and strong domestic market access.

To succeed, investors should align their business goals, such as product type, market focus, and logistics needs, with the strengths of each region. In some cases, a hybrid approach may offer the best balance between cost, connectivity, and flexibility.

Finally, businesses are encouraged to work with local partners or consultants to navigate regulations, identify the right location, and optimize their long-term strategy in Vietnam’s dynamic industrial environment.