Vietnam bets big on chips: $500 million fab to shake up global supply
Hanoi, Monday, 3 March 2025.
Vietnam is making a bold move into the semiconductor industry. The nation is investing $500 million in its first chip factory. The aim is to become technologically self-sufficient by 2050. Incentives, including direct funding, are offered for projects completed before 2031. This could reshape the global semiconductor supply chain. Vietnam’s top technology firms, like Viettel, are already designing 5G chipsets. Experts see this as a ‘once-in-a-century opportunity’ for Vietnam to become a semiconductor powerhouse, backed by partnerships with the US, South Korea, and Japan.
Investment incentives and strategic goals
Vietnam’s government is backing this ambition with substantial financial incentives [1]. Projects completed before December 31, 2030, may receive 30% direct government funding, up to 10 trillion VND [1]. Further incentives include tax benefits allowing companies to reinvest up to 20% of taxable income and land allocation without public auctions [1]. This strategy aims to strengthen domestic chip production, develop R&D infrastructure, support electronics and AI industries, and enhance national security [1]. Nguyen Khac Lich, Director of the Department of ICT Industry, stated this aligns with Vietnam’s Semiconductor Development Strategy to 2030, Vision 2050 [1].
Industry impact and expert opinions
The move has garnered positive reactions from industry leaders [1]. Le Quang Dam, CEO of Marvell Technology Vietnam, called it a ‘once-in-a-century opportunity’ for Vietnam to become a semiconductor powerhouse [1]. Nguyen Trung Kien, vice director of Viettel’s Semiconductor Technology Division, emphasized that semiconductor technology is the future [1]. He added that Viettel is laying the foundation for chip research and production, enabling Vietnam to compete globally [1]. These developments could significantly influence stock valuations for companies involved in Vietnam’s semiconductor sector.
Geopolitical implications and international cooperation
Vietnam’s strategic push occurs amid ongoing US-China trade tensions and global chip shortages, potentially making it a crucial player in the global chip ecosystem by 2050 [1]. The United States, South Korea, and Japan have pledged to strengthen chip partnerships with Vietnam, signaling confidence in its potential [1]. Prime Minister Pham Minh Chinh has actively engaged with Japanese and American businesses, encouraging investment in key sectors like semiconductors [2][3]. He has pledged to protect the rights of investors and ensure political stability to foster a favorable investment climate [2][3].
Economic growth and investment landscape
Prime Minister Pham Minh Chinh aims for 8% economic growth in 2025, with ambitions for double-digit growth in subsequent years [2][3]. He highlighted that Japanese companies are increasingly interested in expanding their investments in Vietnam, with 56.1% planning to do so within 1-2 years, the highest in ASEAN [2]. U.S. companies also value Vietnam’s efforts to improve its investment environment and competitive capabilities, seeking to expand investments in technology, semiconductors, and AI [3]. This influx of foreign investment should positively impact the Vietnamese stock market.