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Vietnam's Strategic Move to Bolster Semiconductor Industry with Power Supply Assurance

Published: 5.17.2024

Vietnam is making strategic moves to secure its place in the global semiconductor industry by ensuring a stable power supply for chip production. Deputy Minister of Planning and Investment Trần Duy Đông recently outlined the country's comprehensive plan in an interview with Nikkei Asia, highlighting steps taken to attract semiconductor investors and address critical infrastructure needs.

Recognizing the essential role of uninterrupted power for semiconductor manufacturing, Vietnam plans to invest heavily in power production infrastructure. They are focusing on the development of several energy projects such as a 500 MW project aimed at enhancing the power supply in the northern region, where chip investment is concentrated.

The Vietnamese government is offering a range of attractive incentives, including tax reductions and increased spending on research and development. These measures are designed to make Vietnam a competitive destination for semiconductor manufacturing, positioning the country as a key player in the global market.

Rapid economic growth in Vietnam has heightened concerns about power shortages, particularly as the country enters the dry season. Reduced hydroelectric power production poses a significant challenge to maintaining a continuous power supply. In response, the government is proactively enhancing power generation capabilities and increasing coal imports for thermal power plants.

Vietnam is also acutely aware of the need to compete with other Asian nations like India and Malaysia, who are also competing for dominance in the semiconductor industry. By strengthening its power infrastructure and offering lucrative incentives, Vietnam aims to position itself as a preferred destination for semiconductor investment.

These initiatives reflect Vietnam's commitment to becoming a significant player in the semiconductor industry. By leveraging both policy measures and infrastructure investments, the country seeks to attract global investors and ensure sustainable economic growth. The government's proactive approach to ensuring a stable power supply and providing competitive incentives highlights its strategic vision for technological advancement and economic development.

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