The Government of Vietnam has taken a decisive step to position itself in the global semiconductor industry. The country has approved the construction of its first wafer fabrication plant, an investment amounting to 12.8 trillion Vietnamese dongs, equivalent to about $500 million or €460 million. This is a strategic move that could transform Vietnam into a significant player in the sector over the coming decades.
The first phase of this plant is set to be completed by 2030 and will focus on the production of specialized chips for defense applications, artificial intelligence, and other high-tech areas. The project will have government backing, with the state funding up to 30% of the total investment and offering tax incentives to attract foreign investment.
An ambitious plan to compete in the global arena
Vietnam already hosts 174 projects related to the semiconductor sector, mainly in chip packaging and testing areas. International companies like Amkor and the American Intel have established operational centers in the country, consolidating Vietnam’s position as an important center for assembly and testing.
However, the ambition goes much further. The development strategy for the semiconductor sector, established by the Vietnamese government until 2050, envisions growth in three phases:
- Phase One (2024-2030):
- Creation of at least 100 chip design companies.
- Establishment of the first semiconductor manufacturing plant.
- Development of 10 packaging and testing facilities.
- Phase Two (2030-2040):
- Expansion to 200 design companies and two manufacturing plants.
- Creation of 15 additional packaging and testing facilities.
- Phase Three (2040-2050):
- Vietnam aims to rank among the global leaders, with three semiconductor factories, 300 design companies, and 20 packaging facilities.
- The objective is to achieve annual revenues exceeding $100 billion in the semiconductor sector and to surpass $1 trillion in the electronics industry, with an added value between 20% and 25%.
Challenges and opportunities
While the initial investment is modest compared to the figures handled by giants like Taiwan or the United States—where an advanced plant can cost over $50 billion—Vietnam is betting on a progressive strategy and attracting international collaboration. It is already in negotiations with major companies like GlobalFoundries (U.S.) and Powerchip Semiconductor Manufacturing Corp (Taiwan).
The country also faces significant challenges: technological dependence on foreign countries, still limited energy infrastructure, and direct competition from other Southeast Asian countries, such as Malaysia, Singapore, and India, which are also seeking to position themselves in this strategic market.
Nevertheless, the process of reconfiguring global supply chains and the increasing demand for chips for applications in automotive, telecommunications, and artificial intelligence systems open a window of opportunity. The signing of agreements with NVIDIA for the establishment of an artificial intelligence research center and Foxconn’s investment in a new integrated circuit plant in Bac Giang reinforce the country’s commitment.
Training and local talent: another key pillar
To support this transformation, Vietnam has launched an ambitious training program aimed at qualifying 50,000 professionals in the sector by 2030, including 42,000 engineers and 500 specialized doctors. Additionally, it offers tax incentives to attract foreign investment, allowing, for example, reinvestment of up to 20% of taxable income without paying taxes.
A future built step by step
Although Vietnam will not join the “club” of semiconductor industry leaders overnight, its steps are clear. The combination of foreign investment, local talent development, collaboration with tech giants, and government support positions the country as a new player to watch on the global stage.
If all goes according to plan, by 2030 Vietnam will not only have its first wafer fabrication plant but will also be much closer to becoming a strategic hub for chip production and advanced technologies in Asia.
Sources: Trendforce