Introduction
Vietnam is making a bold move to establish itself as a key player in the global semiconductor industry. The government has officially approved the construction of the $500 Million Investment: Vietnam’s first-ever wafer fabrication(fab) plant, with a total investment of VND 12.8 trillion (approximately $500 million).
This milestone marks a significant breakthrough in Vietnam’s semiconductor strategy, aiming to boost chip production and reduce reliance on foreign suppliers.
With increasing geopolitical tensions and the global semiconductor race intensifying, Vietnam’s decision to invest in chip manufacturing is a strategic move that could reshape its economic future.
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Key Highlights of Vietnam’s First Wafer Fab
$500 Million Investment: The project marks Vietnam’s entry into semiconductor manufacturing.
Strategic Focus: The fab will produce chips for Defense, AI, and High-Tech applications.
Government Backing: Up to 30% of the investment will be covered by the government, with additional tax incentives.
Long-Term Vision: Vietnam aims to be a global semiconductor hub by 2050, focusing on chip design, packaging, and production.
Challenges Ahead: The country faces infrastructure limitations and competition from Southeast Asian rivals.
Vietnam’s Semiconductor Strategy: A Vision for 2050
The Vietnamese government has outlined an ambitious Semiconductor Industry Development Strategy to position the country as a major player in the global semiconductor supply chain.
In September 2024, Prime Minister Pham Minh Chinh signed Decision No. 1018/QD-TTg, detailing a roadmap for the semiconductor industry. The strategy includes three key phases:
(2024-2030): Establishing the foundation with One wafer fab, 100 chip design firms, and 10 packaging and testing plants.
(2030-2040): Expanding to two wafer fabs, 200 design firms, and 15 packaging facilities, strengthening local production.
(2040-2050): Becoming a global semiconductor leader, with three wafer fabs and 300 design firms, targeting $100 billion in annual revenue.
Vietnam aims to become a semiconductor powerhouse, reducing reliance on imports and developing an end-to-end semiconductor ecosystem.
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Government Support and Financial Incentives
To attract foreign investors and strengthen domestic capabilities, the Vietnamese government is offering strong financial incentives:
- Covering up to 30% of the wafer fab’s investment, capped at VND 10 trillion.
- Corporate income tax exemptions and land-use incentives.
- Subsidies for R&D, training, and infrastructure development.
- The National Semiconductor Development Steering Committee, led by the Prime Minister, will oversee the industry’s progress.
These incentives aim to make Vietnam a competitive destination for semiconductor investment.
Vietnam’s Role in the Global Semiconductor Supply Chain
As global supply chains shift away from China, Vietnam is proving to be one of the best alternatives for the semiconductor industry.
While this is Vietnam’s first wafer fab, the country already plays a crucial role in chip packaging and testing.
It currently hosts 174 foreign semiconductor-related projects with a total investment of nearly $11.6 billion, making it a key player in the industry’s evolving landscape.
Intel operates its largest packaging and testing plant in Vietnam, employing over 2,700 workers.
Amkor Technology invested $1.6 billion in a facility processing 3.6 billion chips annually, covering 5% of the global packaging market.
Hana Micron Vina from South Korea invested $600 million in Bac Giang Province’s semiconductor facility.
Foxconn and Samsung Electronics are expanding operations, with Samsung investing an additional $1 billion in semiconductor R&D.
Vietnam is leveraging its strong electronics and assembly sector to strengthen its semiconductor position.
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Challenges and Hurdles Ahead
Despite the optimism, Vietnam faces significant challenges:
High Costs: Building an advanced wafer fab costs $50 billion or more, far exceeding the $500 million investment in this project.
Infrastructure Issues: Vietnam still struggles with power supply stability and lacks key semiconductor raw materials.
Talent Shortage: The country must train 50,000 semiconductor professionals by 2030 to meet industry demands.
Technology Dependence: Vietnam relies on foreign technology for chip fabrication and needs stronger R&D capabilities.
Regional Competition: Malaysia, Singapore, and Thailand are also competing for semiconductor investments.
Industry experts, including John Neuffer, President of the U.S. Semiconductor Industry Association (SIA), suggest that Vietnam should focus on chip packaging and testing before moving into advanced manufacturing.
The Future: AI, Compound Semiconductors, and Talent Development
Vietnam is also exploring opportunities in AI chips and compound semiconductors.
- NVIDIA signed a partnership with the Vietnamese government to establish an AI R&D center and data hub.
- FPT and NVIDIA are investing $200 million in a next-gen AI factory.
- Foxconn’s Shunsin Technology is building an $80 million IC factory, set to open in 2026.
Additionally, Vietnam launched a Semiconductor Talent Development Program to train 50,000 professionals by 2030, including 42,000 engineers and 500 PhDs.
These efforts aim to reduce reliance on foreign expertise and build a self-sufficient semiconductor ecosystem.
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Conclusion: Vietnam’s Semiconductor Ambitions Take Shape
With strong government backing and increasing foreign investments, Vietnam is well-positioned to play a bigger role in the global semiconductor supply chain.
By 2030, Vietnam could emerge as a key player in mature node chips, packaging, and AI-powered semiconductors, paving the way for long-term economic and technological growth.
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