President Joe Biden’s recent visit to Hanoi marked a significant milestone in the strengthening of ties between the United States and Vietnam, particularly in the semiconductor industry. During his visit, Biden announced various projects and partnerships related to the semiconductor industry, including investments by companies like Nvidia, Microsoft, Synopsys, Marvell, and Amkor in Vietnam. These advancements reflect a broader trend of diversifying supply chains away from China.

Vietnamese policymakers are strategically building foundational supply chains and infrastructure to upgrade their country’s economy. They hope that these investments will enable Vietnam to become a major player in the higher value chipmaking sector and beyond. While foreign companies currently hold most of the keys to Vietnam’s chip industry, the government aims to develop its domestic technological capabilities with the support of these foreign investments.

Vietnam’s rise in the semiconductor industry has been facilitated by multiple factors. Companies increasingly pursue “China plus one” strategies to diversify manufacturing away from China, and many foreign governments encourage this shift as a way to reduce reliance on Chinese manufacturing. Vietnam also offers tax incentives and subsidies to attract foreign investment and support the development of the industry.

However, one of the biggest challenges faced by Vietnam is the lack of semiconductor clusters, which can provide existing infrastructure and talent to newcomers. The government has identified the development of supporting industries as a crucial step towards building a strong chip industry. They aim to follow the success of other East Asian countries in attracting low-value manufacturing and moving towards advanced technological development.

Overall, Vietnam’s strategic investments, tax incentives, and support for domestic technological capabilities position the country to play a significant role in the global semiconductor industry in the coming years.

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By hassani

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