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In brief: The Vietnamese government has just approved the construction of the country’s first-ever wafer fabrication plant. It’s an ambitious project with a total investment of VND 12.8 trillion (~$500 million), and construction is expected to be completed before 2030. But it doesn’t end there. The country also aims to become one of the world’s leading semiconductor nations between 2040 and 2050.
TrendForce reports that the facility will focus on producing specialized chips for high-tech applications like AI, defense tech, and more. It has some serious financial backing as well, with the local government pledging to cover up to 30% of the cost, plus tax incentives. A special steering committee led by Vietnam’s Prime Minister will also oversee everything.
This push shouldn’t come as a total surprise. Over the last couple of years, Vietnam has actively engaged in negotiations and discussions with major chip companies from the US, South Korea, Taiwan, and other leading semiconductor nations. Closed-door talks took place with prominent players like GlobalFoundries and Taiwan’s Powerchip Semiconductor, though no deals have been made public yet.
However, the master plan extends far beyond this project. Last year, the Prime Minister signed off on Vietnam’s semiconductor strategy through 2050. It’s an ambitious one, divided into three phases.
Phase 1 calls for establishing at least 100 chip design companies, one manufacturing plant, and 10 packaging/testing facilities by 2030. Phase 2 will expand that footprint massively to 200 design firms, two fabs, and 15 packaging/testing sites in the 2030-2040 timeframe. Finally, Phase 3 aims to increase these numbers to 300 design houses, three manufacturing plants, 20 packaging/testing facilities, and achieve revenue targets exceeding $100 billion annually by 2050.
Achieving these targets won’t be easy. Industry insiders have pointed out that building an advanced chip fab can cost $50 billion or more – making Vietnam’s $500 million budget seem like pocket change. The head of the US Semiconductor Industry Association even recommended Vietnam focus on low-hanging fruit like chip packaging first, before attempting advanced manufacturing.
However, Vietnam appears intent on an accelerated approach and is reportedly aiming to leverage foreign investment and partnerships with domestic tech companies like Viettel. It will use these to rapidly scale up its semiconductor capabilities across the entire supply chain. The country already hosts nearly 175 foreign semiconductor projects, collectively worth almost $12 billion, even as they are primarily focused on the packaging and testing segments.
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