Vietnam Aims to Build a Computer Chip Factory

Vietnam Aims to Build a Computer Chip Factory

Vietnam is holding talks with companies that manufacture semiconductors for the electronics industry to increase investment in the country.

Two business officials, who did not want to be identified, spoke to Reuters news agency. They said Vietnam aims to build its first factory for computer chips. U.S. industry officials, however, have warned about the high costs.

The Southeast Asian country is already a center for electronics. U.S. technology company Intel says it has its largest semiconductor packaging and testing plant in Vietnam. The country is home to several chip designing software companies.

Vietnam is working on a plan to bring in more semiconductor investment, including foundries. Foundries mainly manufacture computer chips.

Vu Tu Thanh is head of the Vietnam office of the US-ASEAN Business Council. He told Reuters that meetings with six U.S. chip companies took place in recent weeks, including with factory operators. He did not identify the companies because talks were ongoing.

Another official, who did not want to be identified because he was not permitted to talk with the media, spoke with Reuters. The official said talks with possible investors have involved U.S. company GlobalFoundries and Taiwanese company PSMC.

The individual said the aim was to build Vietnam’s first chip manufacturing plant, most likely for less complex chips used in cars or for telecommunications uses.

The business meetings followed an improvement in diplomatic relations between Vietnam and the U.S. in September. At that time, U.S. President Joe Biden visited Vietnam’s capital, Hanoi. Biden’s administration described Vietnam as a possible “critical player” in world semiconductor supply chains.

GlobalFoundries joined a restricted business meeting during Biden’s visit after an invitation from the president, the company said. However, a person with knowledge of the subject said the company has not made immediate plans to invest in Vietnam.

"We do not comment on market rumors," a GlobalFoundries spokesperson said. PSMC did not answer a request for comment.

Industry officials said meetings so far were mostly to test interest and discuss possible government financial support. Such support would seek to persuade the companies with reasons why it would be good to build a plant there, or incentives. They include power supplies, infrastructure, and the availability of a trained workforce.

The Vietnamese government has said it wants its first fabrication plant by about 2030. On Monday, the government said chip companies would gain from “the highest incentives available in Vietnam.”

Hung Nguyen is a program leader on supply chains at Hanoi’s University Vietnam. He told Reuters that Vietnam might also support local companies such as state-owned tech company Viettel to build chip factories with imported equipment.

Viettel did not answer a request for comment.

$50 billion decision

Robert Li is Vice President of U.S. Synopsys, a leading chip design firm with operations in Vietnam. He urged the government to “think twice” before giving out financial support, or subsidies, to build chip factories.

Speaking at Vietnam Semiconductor Summit in Hanoi on Sunday, he said building a foundry could cost as much as $50 billion. He said it would mean providing subsidies competitive with China, the U.S., South Korea and the European Union. Each has announced spending plans for chip factories valued at between $50 and $150 billion.

John Neuffer is President of the U.S. Semiconductor Industry Association. At the same meeting, he suggested the government center its attention on chip manufacturing in which Vietnam is already strong, like assembling, packaging and testing.

I’m Caty Weaver.

Reuters reported this story. Gregory Stachel adapted the story for VOA Learning English.

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Words in This Story

semiconductor – n. a material or object that allows some electricity or heat to move through it and that is used especially in electronic devices

computer chip –n. a small, flat semiconducting material that has electrical connections of varying levels of complexity on it

package –v. to prepare something so it is ready to sell or be offered to the public

critical – adj. extremely important

supply chain – n. a network of businesses that supply the materials and parts needed to provide people with products and goods

rumor – n. information or a story that is passed from person to person but has not been proven to be true

infrastructure – n. the basic equipment and structures (such as roads and bridges) that are needed for a country, region, or organization to function properly

assemble –v. to put something together in a more complete form