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Vietnam - the new destination for the semiconductor industry

Vietnam - the new destination for the semiconductor industry

Friday 12, 08 2022
With Samsung planning to manufacture semiconductor components in Vietnam, there is hope brewing that Vietnam will become a new destination for the semiconductor industry.

Investments from Samsung

In his recent visit to Vietnam, Mr. Roh Tae-Moon, CEO of Samsung Electronics, announced that Samsung would make an additional investment in Vietnam, with a fund of 3.3 billion USD.

The company is also making preparations to start trial production of flip-chip ball grid arrays. The product will be mass-produced from July 2023 at the Samsung Electro-Mechanics Vietnam in Thai Nguyen.

Samsung Electro-Mechanics Vietnam

A part of the 3.3 billion USD fund that Mr. Roh announced has already been invested in Vietnam. Specifically, 841 million USD was spent on the Samsung Complex HCMC – SEHC, and 1.187 billion USD was invested in the Samsung Electro-Mechanics Vietnam in Thai Nguyen.

With the plan to produce semiconductor components in Vietnam, Samsung Electro-Mechanics seems to be becoming the focus of attention. This factory is also being continuously expanded in recent times.

Samsung also plans to inaugurate an R&D Center in Hanoi by the end of this year or early 2023. That is the group's R&D center, about 85% completed. It would be Samsung’s major R&D hub in Vietnam and Southeast Asia.

According to Nikkei Asia, semiconductors will mark Samsung's third business in Vietnam, where the company is manufacturing home appliances and half of its smartphone products.

Mr. Roh Tae-Moon said that in the first 6 months of the year, Samsung Vietnam's total export turnover reached 34.3 billion USD, up 18% over the same period last year. In February, Samsung announced to pour an additional 920 million USD into the factory in Vietnam.

Vietnam, a potential new semiconductor industry hub

Recently, more and more investors are getting interested in the semiconductor field in Vietnam. Intel is among the most notable names.

 largest chip manufacturers

As one of the 3 largest chip manufacturers in the world today (including TSMC, Samsung, and Intel), Intel invested 1 billion USD in chip production in Vietnam many years ago. Until now, the Intel factory still operating in Vietnam is one of the important production sites of the group.

But Intel's plan does not stop there. In recent meetings with Vietnamese leaders, Intel has confirmed that it will expand its investment in Vietnam, with an investment many times higher than before.

It is expected that this week, Intel will continue to meet to discuss support mechanisms and investment incentives for investors from the United States. If the mechanism is open, Intel's opportunity to attract investment is very great, because recently, this corporation has continuously announced large-scale investment plans.

Along with Intel, many other investors have also been planning to invest in manufacturing semiconductor devices and components in Vietnam. For example, Amkor (Korea) with a plan of 1.6 billion USD; Hana Micron (Korea) with a plan to invest 500 million USD in Vietnam. In addition, there are Renesas, Applied Micro, Splendid, Sonion, etc., with quite small project scales.

In May 2022, during a meeting with Prime Minister Pham Minh Chinh, the CEO of Intel Corporation assessed that Vietnam is an attractive destination for investors, with a dynamic economy, and market full of potential. That is why Intel decided to continue investing in Vietnam at many times the current scale.

Foreign investors have positive reviews about Vietnam. However, in a report related to the issue of attracting investment in key industries, including the semiconductor industry, the Foreign Investment Agency assessed that there are problems with market capacity, supporting industries, human resources, and logistics. Also, the policies of economic development of the industry, and investment incentives in this field would be obstacles to attracting investment.

Foreign investors

"To attract investment in the semiconductor sector, perhaps, Vietnam needs a more fundamental preparation," said the Foreign Investment Agency.

It is not easy for Vietnam to become a new destination for the global semiconductor industry. What the country needs to do now is to prepare the conditions to be able to receive large-scale projects in this field. With Samsung’s new investment plan and Intel accelerating its investment, there may be other big names pouring capital into Vietnam.


Compiled by VietnamCredit

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