- November 13, 2024
- Posted by: GBS
- Categories: Business, GBS
In a rapidly shifting global semiconductor landscape, Vietnam is gaining traction as a leading destination for chip testing and packaging operations.
According to a recent article by Reuters, companies worldwide are expanding their semiconductor manufacturing footprint in Vietnam, aiming to diversify their supply chains and reduce reliance on single markets. This wave of investment is transforming Vietnam into a significant hub for the semiconductor industry’s back-end segment.
While back-end semiconductor manufacturing—focusing on data and infrastructure—requires less capital investment than front-end production, it remains essential for the global technology ecosystem. China and Taiwan have historically dominated this segment, but Vietnam’s competitive advantages are positioning it as an emerging player. Vietnam’s semiconductor production growth rate is now one of the fastest globally.
Strategic Expansion by Global Players
South Korea’s Hana Micron, in response to customer demands for diversified production locations, has announced significant expansion plans in Vietnam. “The response from our clients has underscored the need to expand our footprint here,” shared Hana Micron’s Vice President, Cho Hyung Rae. The company has committed to investing approximately 1.3 trillion won ($930.49 million) through 2026 to bolster its memory chip packaging operations.
Meanwhile, Amkor Technology, a leading U.S.-based semiconductor packaging and test services provider, revealed plans to invest $1.6 billion in a new 200,000-square-meter facility. The company has already begun transferring equipment from China to Vietnam, signaling confidence in the country’s potential for semiconductor advancements.
If the current investment momentum continues, Vietnam could account for around 8-9% of the global chip assembly, testing, and packaging capacity by 2032—a significant leap from just 1% in 2022, according to a report by the Global Semiconductor Industry Association and the Boston Consulting Group.
Local Enterprises Embrace Semiconductor Innovation
Vietnamese firms are not standing still amid the influx of foreign investment. Leading Vietnamese technology company FPT has inaugurated a chip testing facility near Hanoi, set to begin operations next year. With a $10 million investment, FPT plans to triple the scale of this operation by 2026. The company is also actively seeking strategic partners to bolster its semiconductor endeavors. Additionally, Vietnamese giants like Sovico and Viettel are increasing investments in semiconductor technology, contributing to Vietnam’s growing semiconductor ecosystem.
Vietnam’s Appeal for Foreign Investors
Sophie Dao, Senior Partner at GBS – Global Business Services LLC, a prominent investment consulting firm in Vietnam, expressed optimism about the country’s trajectory in the semiconductor sector. “Vietnam’s rise as a semiconductor manufacturing hub reflects its strategic advantages—skilled labor, favorable policies, and robust infrastructure,” said Dao. “We’re witnessing an unprecedented wave of investments that not only diversifies global supply chains but also elevates Vietnam’s role in the technology landscape.”
Dao further noted, “For foreign investors, Vietnam offers a blend of stability and growth. The government’s proactive approach, coupled with its commitment to industrial innovation, makes Vietnam an ideal partner for long-term investments in advanced technology sectors.”
A Bright Future for Vietnam’s Semiconductor Industry
Vietnam’s ascent in the semiconductor industry offers a unique opportunity for foreign investors to tap into a dynamic, rapidly evolving market. As international players and local enterprises continue to expand their semiconductor capabilities, Vietnam is poised to become a cornerstone of the global semiconductor supply chain.
Source: GBS