Despite daunting challenges in the trade sector across the globe, Vietnam has been persistent in its goal of luring high-quality foreign direct investment (FDI), with the semiconductor industry expected to breath fresh air into the nation’s economy.
Over the past 30 years of FDI attraction, Vietnam has received substantial FDI inflows, turning itself into a rising star in the global supply chain. Initially, most of the capital was funneled into garment and textiles and leather shoes – which are labour intensive industries with low added value. However, thanks to investment from a number of tech giants, Vietnam has quickly moved up the value chain, on the pathway to becoming an important electronic assembly centre.
Amidst decreasing investment flows in the world, Vietnam is striving to lure investment in chip production, which is expected to bring recovery hope to Vietnam when the business cycle changes.
Semiconductor industry attracts waves of FDI
Many semiconductor giants from the US such as Intel, Amkor, Marvell and GlobalFoundries have signed commitments to invest in Vietnam.
Hana Micron, a semiconductor manufacturer from the Republic of Korea, recently inaugurated the first semiconductor plant in the northern region at Van Trung Industrial Park, Bac Giang province.
The company, which specialises in manufacturing and processing of integrated circuit boards for mobile phones and other smart electronic devices, has so far registered 600 million USD in Vietnam’s operation. The first phase of the plant was put into operation in November 2020.
According to Hana Micron Chairman Choi Chang Ho, Hana Micron plans to raise its investment in chip production in Vietnam to 1 billion USD by 2025.
The firm targets 800 million USD in revenue every year and generation of 4,000 jobs for Vietnamese workers.
Meanwhile, US Amkor Technology will start operations at a new 1.6 billion USD factory in Bac Ninh province in October. Synopsys will invest in semiconductor design and incubation centres in Ho Chi Minh City, while Marvell will soon announce its plan to develop a global-level design centre in Ho Chi Minh City.
Earlier, Vietnam’s largest FDI provider Samsung committed more than 2.6 billion USD in the semiconductor industry at Samsung Electro-Mechanics in Thai Nguyen province.
They are vivid illustrations of the fact that Vietnam has been on the right track to lure high-quality FDI projects. Bac Giang, Bac Ninh, Thai Nguyen and Ho Chi Minh City not only lead the nation in the assembly of electronic components but also have become production hubs of an industry with high technology content and high added value.
According to Chairman of Vietnam’s Association of Foreign Invested Enterprises (VAFIE) Nguyen Mai, foreign firms have committed to injecting around 5 billion USD in Vietnam’s semiconductor industry.
He called on localities to develop incentives to attract both domestic and foreign capital in the semiconductor value chain.
Vietnam boasts huge potential to develop its semiconductor industry as the scale of the chip production market reached 600 billion USD last year, and is expected to reach 1.4 trillion USD by 2029.
Permanent Vice Chairman of the People’s Committee of Bac Ninh province Vuong Quoc Tuan said it is necessary to improve human resources quality to meet requirements from the investors.
Bac Ninh plans to open schools that provide global-level semiconductor training to better serve the human resource needs of high-tech investors, he added./.
