Vietnam approves $500 million for semiconductor plant

The Vietnamese government has reportedly approved USD 500 million in investment to establish a semiconductor fabrication factory in the country.

The semiconductor research, design, production, packaging and testing facility will be the country’s first government-funded fab and part of a long-term strategy to shore up its domestic semiconductor industry by 2050, according to media reports.

The new plant will focus on the production of small-scale, high-tech chips to support domestic industries and national security, reducing Vietnam’s reliance on global supply chains, according to news outlet Vietnam Net.

To support its goal of transitioning Vietnam from being a low-cost manufacturing base to investing in chip research, design, and production, the government is offering several financial incentives to attract private investment in the sector. This includes 30% in direct funding for the chip fab if it is completed before the end of this decade, and allowing semiconductor firms to retain up to 20% of taxable income for reinvestment.

The Vietnam-US Comprehensive Strategic Partnership has also given a boost to the local industry, and prompted global semiconductor companies to expand operations in the country. Big players like Intel, OnSemi and Amkor have already established their presence in Vietnam, particularly in OSAT facilities and R&D centers.  

Major Asian economies like South Korea and Japan have also pledged to strengthen chip partnerships with Vietnam. However, Vietnam faces challenges such as a shortage of highly skilled semiconductor engineers and high initial investment costs for chip fabrication plants.

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