Semiconductor Vietnam Manufacturing Chip

Vietnam plans first semiconductor chip manufacturing plant

Vietnam is taking strategic steps to bolster its foothold in the global semiconductor industry. The Southeast Asian nation is already home to Intel’s largest semiconductor packaging and testing facility worldwide. It is actively engaging in discussions with several U.S. chip companies to potentially construct its inaugural chip manufacturing plant, commonly referred to as a “fab.” This ambitious endeavor aligns with Vietnam’s broader strategy to attract substantial investments in semiconductor manufacturing, particularly from foundries specializing in chip production.

Over the past few weeks, Vietnam has held meetings with approximately six prominent U.S. chip firms. These meetings included operators of fabrication facilities. However, the names of these companies remain undisclosed as talks are still in their preliminary stages. Vu Tu Thanh, the head of the Vietnam office of the US-ASEAN Business Council, has confirmed the discussions.

Additionally, an executive in the chip industry, who wished to remain anonymous, disclosed that negotiations with potential investors have involved U.S. contract manufacturer GlobalFoundries and Taiwan’s PSMC. The primary objective is to establish Vietnam’s maiden fab. Moreover, the focus will be on manufacturing less advanced chips intended for use in automotive applications or telecommunications.

President Biden invited semiconductor giant, GlobalFoundries to a Vietnam hosted business summit

This concerted effort follows a historic upgrade in diplomatic relations between the United States and Vietnam in September. During President Joe Biden’s visit to Hanoi, the White House recognized Vietnam as a “critical player” in the global semiconductor supply chain. Notably, GlobalFoundries participated in a restricted business summit during the president’s visit, an invitation extended by President Biden himself. However, the company has not exhibited immediate interest in investing in Vietnam, according to sources familiar with the matter. GlobalFoundries responded to inquiries by stating they do not comment on market rumors. Subsequently, PSMC did not provide a response to the request for comment.

Currently, these discussions have a primary goal: assessing interest levels. They also aim to deliberate potential incentives and subsidies. These may include support for power supplies, infrastructure development, and the availability of a trained workforce. The Vietnamese government has expressed its ambition to establish the country’s inaugural semiconductor fab by the end of this decade. It has declared that chip companies will benefit from “the highest incentives available in Vietnam.” Furthermore, there is a possibility that the Vietnamese government may support local entities in building fabs with imported equipment. These local entities include state-owned technology firm Viettel. However, Viettel did not respond to requests for comments.

Vietnam’s pursuit of a homegrown semiconductor manufacturing facility reflects the nation’s commitment to expanding its presence in the global technology sector and reducing its dependence on foreign suppliers. As the semiconductor industry plays an increasingly pivotal role in various domains, including telecommunications, automotive, and consumer electronics, securing a foothold in chip manufacturing could prove pivotal for Vietnam’s technological and economic advancement.

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