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Vietnam Key Player in US Chip Diversification Move

Published: 9.18.2023

The United States and Vietnam have inked a memorandum of cooperation aimed at bolstering the semiconductor ecosystem in Vietnam while supporting American industry interests. This strategic partnership between the two nations signifies Vietnam's increasing appeal as an investment destination for global semiconductor giants.

The signing took place during President Biden's visit to Vietnam and saw top U.S. chip companies, including Intel and GlobalFoundries, engaging in discussions to enhance their ties.

Intel operates a massive $1.5 billion facility in Ho Chi Minh City, Vietnam's southern economic hub. This facility specializes in chip assembly, packaging, and testing and serves as Intel's largest production base, accounting for approximately 70% of its global production.

Other investments in Vietnam's semiconductor industry comes from Amkor Technology where they have committed a substantial $1.6 billion investment in Bac Ninh province, situated on the outskirts of Hanoi. The construction of the company's state-of-the-art semiconductor factory is set to conclude in September, with trial operations scheduled to commence in October.

The Biden administration has been proactive in safeguarding semiconductor supply chains and minimizing exposure to risks associated with China. In line with this commitment, President Biden signed the Chips and Science Act into law in August 2022, making $100 million annually available for five years to support the semiconductor industry.

Apart from the United States, other countries have also expressed interest in Vietnam's growing semiconductor sector. South Korea's technology giant Samsung has two companies in Bac Ninh, Samsung Electronics Vietnam and Samsung Display Vietnam, both of which have made substantial contributions to the local economy.

Furthermore, Samsung operates Samsung Electronics Vietnam Thai Nguyen in Thai Nguyen province and the Samsung HCMC CE Complex in Ho Chi Minh City. In 2022, these Vietnamese subsidiaries collectively reported after-tax profits of 6,055.9 billion won, marking a notable 16.28% increase compared to the previous year.

The collaboration between the United States and Vietnam in expanding the semiconductor ecosystem is not only beneficial to both nations but also reinforces Vietnam's position as a key player in the global semiconductor industry. As the demand for advanced semiconductor technologies continues to surge worldwide, Vietnam's strategic location and commitment to innovation are set to play an increasingly pivotal role in shaping the future of this critical industry.

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