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U.S. Considers Vietnam a Top Country for Semiconductor Development Assistance

Published: 1.31.2024

During a recent visit to Vietnam, Jose Fernandez, the U.S. Deputy Minister of Foreign Affairs, revealed that the U.S. is targeting seven countries in the Science and CHIPS Act, with a $500 million investment earmarked for improving semiconductor education, cybersecurity, and business environment. 

Fernandez emphasized the importance of Vietnam taking action promptly to attract investments in critical industries such as clean energy and minerals, which can be used for electric vehicles and batteries. 

The U.S. plans to allocate foreign aid under the CHIPS Act based on recommendations from the Organization for Economic Cooperation and Development (OECD) expected in February. The OECD will study the needs of businesses in countries like Vietnam to develop the semiconductor industry. 

"We have reviewed the list of countries that we feel could benefit from our support, and Vietnam is one of the first countries that come to our minds," stated Jose Fernandez to Nikkei Asia. 

Vietnam, known for exporting electronics, apparel, and food, plays a pivotal role in the U.S.'s efforts to shift supply chains away from China. 

Data from the U.S. Geological Survey reveals that Vietnam ranks second globally in rare earth metal reserves, only after China, though the exploitable quantity is not yet clear. 

The U.S. aims to rebuild its presence in the rare earth market, which has been dominated by China's low-cost production for decades. Rare earths are a strategic weakness for the U.S. in the technology rivalry with China, as the U.S. has not produced them since 2017. Recently, the U.S. is reviving its rare earth mining, signing agreements with 13 countries for financial and diplomatic support in mineral exploration. The U.S. has proposed to assist Vietnam in surveying its rare earth reserves. 

"There is a global hunger for critical minerals. The competitive advantage for the U.S. and its partners is that mining benefits communities, does not degrade the environment, and brings technology and investment," said Jose Fernandez. 

When asked about the U.S. divesting from China, he remarked, "This is an opportunity. Vietnam has the potential to become an even larger manufacturing hub." 

He further praised Vietnam's youthful workforce as an asset, advising students during his visit, "Take advantage of this because it may not exist forever." 

After leaving Vietnam, U.S. Deputy Minister of Foreign Affairs Jose Fernandez is scheduled to visit the Philippines on Monday (January 29), followed by South Korea. 

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