A major breakthrough

The project, which is scheduled for completion before 2030, marks a major breakthrough in the country’s semiconductor industry strategy. It will specialise in producing chips for defence applications, artificial intelligence (AI), and high-tech industries.

The Government has pledged financial support of up to 30% of the total investment along with tax incentives. A special steering committee, led by Prime Minister Pham Minh Chinh, is set to oversee and coordinate the project.

The establishment of Vietnam’s first wafer manufacturing plant will not only meet domestic demand, but also open up export opportunities, thereby helping to enhance the country’s position in the global supply chain. This project is expected to create thousands of jobs for local workers and further promote the development of related supporting industries.

In recent years, Vietnam has made significant efforts to join the semiconductor industry. In 2023, it engaged in negotiations with major chip manufacturers from the United States, the Republic of Korea, and others to strengthen its position in semiconductor manufacturing.

According to Vu Tu Thanh, executive director of the US-ASEAN Business Council in Vietnam, Vietnam has been in discussions with six US chip companies. While specific names have not been disclosed due to ongoing negotiations, a governmental official revealed that discussions involve GlobalFoundries (USA) and Powerchip Semiconductor Manufacturing Corp (PSMC) from Taiwan (China) as potential investors.

Ambitious objectives

In September 2024, Prime Minister Pham Minh Chinh signed Decision No. 1018/QD-TTg, announcing the Vietnamese Semiconductor Industry Development Strategy with a vision towards the 2030 - 2050 period.

The strategy outlines a three-phase roadmap to position Vietnam as a global semiconductor hub. In Phase 1 (2024-2030), the country will leverage its geographical and human resource advantages to attract foreign investment, aiming to establish at least 100 chip design firms, one semiconductor manufacturing plant, and 10 packaging and testing facilities.

Phase 2 (2030-2040) will see the expansion to at least 200 design companies, two chip manufacturing plants, and 15 packaging and testing facilities. In the final phase (2040-2050), Vietnam aims to become a leading nation in semiconductors and electronics.

To achieve these objectives, the Government has introduced incentives, including tax reductions and land support. However, challenges remain, particularly as building a wafer fabrication plant can cost up to US$50 billion, far exceeding the current budget of US$500 million.

Foreign investment attraction

Vietnam has so far attracted 174 foreign semiconductor projects with a total investment of nearly US$11.6 billion. Big names like Intel, Amkor Technology, and Hana Micron Vina have helped develop a strong packaging and testing hub.

The country is also making strides in AI and compound semiconductors. NVIDIA has signed an agreement with the Government to establish an AI R&D centre and data hub in the country. Domestic firms like military-run Viettel are also investing in chip design and manufacturing.

To bridge the technology gap, Vietnam has launched the Semiconductor Workforce Development Programme which aims to train 50,000 semiconductor experts by 2030. The Government has also introduced tax incentives and R&D subsidies to attract further foreign investment.

Despite facing numerous challenges, global supply chain restructuring and the AI chip boom present Vietnam with a unique opportunity. By focusing on chips for automotive and telecommunications applications, the country is on track to complete its first wafer fabrication plant by 2030 as it strives to solidify its role in the global semiconductor landscape.

Vietnam aims for a key role in global semiconductor and AI

VOV.VN - Vietnam is ramping up its efforts to integrate into the global semiconductor and AI ecosystem, positioning itself as a crucial link in the global supply chain.