Vietnam has begun to build an ecosystem for semiconductor production

According to VNA, local economists said that the global chip race is heating up and Vietnam should be able to boost its position on the global semiconductor manufacturing map as some leading companies are investing in chip production in the country.

Professor Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), said the adverse impact of the COVID-19 pandemic and the prolonged trade conflict have disrupted the supply of semiconductors. Global companies involved in using semiconductors to make smartphones, self-driving cars, artificial intelligence (AI) technology or data centers have been forced to cut production capacity.

Mai emphasized that countries are racing to produce semiconductors and chips. In particular, the U.S. Department of Commerce released a strategy for implementing its $50 billion chip bill in September. China has doubled spending and instituted policies to support semiconductor manufacturing companies.

Vietnam has also become the center of the semiconductor industry. Samsung announced plans to invest an additional US$920 million in semiconductor production from July next year. The country also has Intel's largest assembly and test plant, with an investment of $1.5 billion.

Do Nhat Hoang, director of the Foreign Investment Bureau of the Ministry of Planning and Investment, said that the US company Synopsys also announced that it will train electrical engineers in Vietnam and support the establishment of a chip design center in Ho Chi Minh City High Technology Park (SHTP) through a software sponsorship program.

Hoang added that in the first 10 months of this year, foreign direct investment disbursements reached US$17.45 billion, a 15.2 percent increase from the same period in 2021, the highest figure in the past five years. Among them, the manufacturing industry accounted for 65%, involving major industries such as high-tech electronics and chip production. This shows that Vietnam has gradually begun to form an ecosystem for semiconductor and chip production.

Over the years, Vietnam's investment environment has been highly appreciated by foreign investors for its stable political system and fast-growing economy. Incentives through corporate income tax have also made an important contribution to creating an attractive investment climate.

“Vietnam should not be complacent because we need to assess bottlenecks in attracting FDI, such as transportation infrastructure and information networks,” Mai said.

He pointed out that if Vietnam can participate in the semiconductor industry, it will bring huge added value to the country.