Vietnam’s ambitious plan to build its first chipmaking plant

Vietnam is in talks with chip companies to attract investment and potentially build its first chipmaking plant, despite concerns about ensuing high costs. The country, already hosting Intel’s largest semiconductor plant, is working on a strategy to attract more semiconductor investment. The government has set a goal to have its first fab operational by the end of the decade.

Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council, has confirmed that already meetings with U.S. chip firms have taken place to discuss potential incentives and subsidies. The meetings followed after President Joe Biden’s visit to Hanoi, when the White House recognised Vietnam as a potential key player in global semiconductor supply chains.

Detractors also point out that dolling out subsidies for building fabs could turn out to be a costly affair. Building a foundry can cost up to $50 billion and would require competing with subsidies offered by China, the US, South Korea, and the European Union. These countries have already announced plans to spend between $50 and $150 billion each. Instead, they propose that it would be prudent to concentrate on chip sectors where Vietnam has a comparative advantage, such as assembling, packaging, and testing.