Vietnam is looking to get into the semiconductor manufacturing business as it aims to build its first chipmaking fab.
According to a report from Reuters, while the country currently has several chip design software firms and Intel Corp. has a chip packaging and testing plant, the government is seeking to attract more semiconductor investment from chipmakers including pure-play foundries.
The country has already held high level meetings with U.S. and Taiwanese chip firms including America’s GlobalFoundries and Taipei’s Powerchip Semiconductor Manufacturing Co., Ltd. (PSMC), the report said. These meetings followed the formal ties established between Vietnam and the U.S. in September when President Biden visited the country.
Vietnam’s first fab will likely be for the development of less advanced chips used in cars or for telecom applications, the report said.
The Vietnamese government would seek to have a deal done for the first fab by the end of the decade and it could be used to support locally grown tech firms like Viettel.
Why it matters
Nations globally are seeking to foster homegrown semiconductor supply chains after the COVID-19 pandemic revealed flaws in the aggregation in the chip supply chain after lockdowns caused a massive chip shortage that lasted many years.
To fortify the stability of the supply chain, the aim is to spread the wealth of semiconductor manufacturing to different regions globally. So, if one sector falls or sustains delays because of geopolitical matters or another pandemic, the supply chain will be more resilient and buffer the affected sectors.
Additionally, this gives these regions a boost in revenue as the semiconductor industry is expected to grow at 5% over the next decade, according to the Semiconductor Industry Association.
Europe and the U.S. are expanding their own semiconductor manufacturing capabilities through the European Chips Act and CHIPS and Science Act, respectfully. These plans will infuse some $50 billion in incentives to encourage manufacturing in the regions.
Japan is also seeking to regain its status as a semiconductor powerhouse with the infusion of its own incentives to encourage chipmaker investment.
