Vietnam plans to build first semiconductor plant

The Southeast Asian electronics manufacturing hub already hosts U.S. giant Intel's largest semiconductor packaging and testing plant worldwide and is home to several chip-designing software firms. It is working on a strategy to attract more semiconductor investment, including from foundries, which focus on manufacturing chips.

Meetings with a half-dozen US chip businesses, including fab operators, have taken place in recent weeks, according to Vu Tu Thanh, chairman of the US-ASEAN Business Council's Vietnam office. He declined to name the companies since negotiations were still in their early stages, according to Reuters. 

According to a chip executive who declined to be identified because he was not permitted to speak to the media, conversations with possible investors have included US contract maker GlobalFoundries and Taiwan's PSMC.

The goal was to develop Vietnam's first fab, most likely for less sophisticated chips used in autos or telecoms applications, according to the executive.

The discussions followed a historic improvement in official ties between Vietnam and the United States in September when President Joe Biden visited Hanoi and the White House labeled the erstwhile rival as possibly a "critical player" in semiconductor global supply chains.

GlobalFoundries attended a limited business gathering during Biden's visit after receiving an invitation from the president directly, according to the company, but has subsequently showed little immediate interest in investing in Vietnam, according to a source familiar with the subject.

"We do not comment on market rumors," a GlobalFoundries spokeswoman stated when asked about future conversations. PSMC did not respond to a request for comment.

Meetings at this level, according to industry executives, were largely to gauge interest and explore potential incentives and subsidies, such as power supply, infrastructure, and the availability of educated labor.

The Vietnamese government has stated that it wants its own fab by the end of this decade, and on Monday stated that chip makers will benefit from "the highest incentives available in Vietnam."

According to Hung Nguyen, senior program manager on supply chains at Hanoi's University Vietnam, it may also help local enterprises such as state-owned tech giant Viettel develop fabs with foreign equipment. 

Viettel did not respond to a request for comment.

Source: Reuters