Vietnam will be the site of a new Samsung plant that will build display modules for mobile phones and tablets, the first site of its kind in the Asian country. The approval for the license was granted to a subsidiary of the Seoul, South Korea-based company.

The proposed facility will cost around $1 billion. Construction will start at the Bac Ninh province site some time in 2015.

The facility will be the first of the company's in Vietnam. The exact type of displays that are to be built at the facility is unclear at this point. Competition is high in the mobile device market and to stay competitive Samsung is moving to lower its production costs with lower labor and manufacturing costs in the southeast Asian country.

Rivals in China like Lenovo and others are posing a challenge to the South Korean powerhouse device manufacturer. Huawei Technologies Co. Ltd. is another Chinese contender in the smartphone and tablet market. Samsung is a top producer in terms of devices sold worldwide, along with Apple. The company even released a new smartwatch powered by Android OS.

Samsung's mobile phones are already manufactured in Vietnam. The $1 billion Samsung display facility there, according to plan anyway, will provide better service to Samsung in getting the displays to the company. Samsung Electronics owns nearly 85 percent of the unlisted Samsung Display.

Based on reports, Samsung also manufactures devices like handsets and tablets in China, Brazil and its home base, South Korea. Vietnam is considered to be a key component in the rise of Samsung, who first built a facility there in 2011.

Samsung is reportedly the largest manufacturer of mobile handsets in the world. South Korea is a major foreign investor in Vietnam. Japan is the only country that invests more in the country. Beyond cheap labor, Vietnam also offers lower taxes and a large amount of young workers.

Samsung's two handset factories located to the north of Hanoi reportedly produce more than 200 million units per year. That equals about half its mobile handset production internationally.