In 2022, Vietnam exported $6.5 billion worth of semiconductor equipment, accounting for 3.8% of global export turnover and ranking among the top 3 in Asia for semiconductor exports to the United States. In the medium term, Vietnam has the potential to become a regional hub for outsourced semiconductor assembly and testing (OSAT). However, Vietnam currently lacks many fundamental elements of a semiconductor industrial ecosystem, including technology, supply chains, human resources, capital, data, and energy.
With its strategic location and outstanding development potential, Hanoi is attracting strong attention from FDI enterprises, thanks to the support from local government. This has created a robust wave of investment into the semiconductor industry. However, alongside these great opportunities, Hanoi also faces significant challenges.
Currently, businesses are considering Hanoi, and Vietnam in general, as an ideal destination for investment and production expansion. Typically, Apple has completed the relocation of 11 factories to Vietnam, while Intel is expanding the second phase of its chip inspection facility in Ho Chi Minh City, with an investment of $4 billion slated for completion by 2025. Additionally, Boeing, Google, and Walmart have announced plans to expand their supply networks and manufacturing facilities in Vietnam after conducting market research.
Moreover, Vietnam possesses about 22 million tons of rare earth reserves, roughly half of China’s total reserves. This plays a crucial role in controlling the essential raw materials needed for semiconductor production. At the same time, Vietnam also has a strategic advantage in attracting FDI into renewable energy sectors such as wind power, solar power, and future technologies.
With an economic growth forecast of around 6.5% in 2024, along with the recovery of industry and construction sectors, the implementation of 17 new-generation free trade agreements (FTAs), and successes in economic diplomacy, a new wave of FDI with higher quality and efficiency is likely to emerge in the coming years.