The Vietnamese government has approved a 12.8 trillion VND ($500 million) investment to establish a high-tech semiconductor fabrication plant, marking a major step in developing a domestic chip industry and securing supply chain resilience.

Aiming to strengthen its position in the global semiconductor supply chain, Vietnam has announced its first government-backed chip manufacturing plant and incentives to boost domestic R&D, innovation, and production capabilities.

With government funding of up to 12.8 trillion VND ($500 million), Vietnam is taking concrete steps toward establishing a small-scale semiconductor fabrication plant to support national defense, high-tech industries, and research needs.

To accelerate semiconductor research, design, and production, Vietnam will invest in a state-supported semiconductor fabrication facility, reinforcing its long-term vision for technological self-sufficiency by 2050.

Recognizing the strategic importance of semiconductors, Vietnam is launching its first government-backed chip fabrication plant, setting the stage for future growth in advanced electronics and AI-driven technologies.

Vietnam is making a bold move into the global semiconductor industry with plans to build its first chip fabrication plant, backed by government funding of up to 12.8 trillion VND ($500 million). This project is a crucial step in developing domestic semiconductor capabilities, ensuring technological sovereignty, and integrating into the global chip supply chain.

According to Nguyen Khac Lich, director of the Department of ICT Industry (Ministry of Information and Communications), this initiative aligns with Vietnam’s Semiconductor Development Strategy to 2030, Vision 2050, recently signed by the Prime Minister.

Vietnam aims to move beyond being a low-cost manufacturing hub by investing in chip research, design, and production. The new fabrication plant will initially focus on small-scale, high-tech chip production, supporting domestic industries, national security, and global supply chains.

Key objectives of the project include strengthening domestic chip production capabilities to reduce reliance on global suppliers, providing essential infrastructure for research and development (R&D), supporting Vietnam’s growing electronics and AI industries, and enhancing national security with locally manufactured chips.

To attract private investment and boost local semiconductor expertise, the Vietnamese government is offering several financial incentives for companies investing in semiconductor manufacturing.

These include 30% direct government funding for the project (up to 10 trillion VND) if completed before December 31, 2030, tax incentives allowing semiconductor companies to retain up to 20% of taxable income for reinvestment, and land allocation for semiconductor factories without public auctions, enabling companies to build high-tech facilities faster.

Additionally, the Prime Minister will directly oversee the selection of private companies to partner with the government on this initiative.

Vietnam’s emerging chip leaders: Viettel and FPT

Vietnam’s top technology firms, including Viettel and FPT, have already entered the semiconductor race, with Viettel successfully designing Southeast Asia’s most advanced 5G chipset - capable of processing 1 trillion calculations per second.

“Semiconductor technology is the future,” said Nguyen Trung Kien, vice director of Viettel’s Semiconductor Technology Division. “Viettel has been laying the foundation for chip research and production, and this initiative will allow Vietnam to compete globally in semiconductor design and manufacturing.”

Meanwhile, Marvell Technology Vietnam CEO Le Quang Dam emphasized the geopolitical urgency of investing in semiconductors. “This is a once-in-a-century opportunity for Vietnam to establish itself as a semiconductor powerhouse,” he noted.

With ongoing U.S.-China trade tensions and global chip shortages, Vietnam is well-positioned to attract foreign investment from major semiconductor firms looking to diversify production.

Countries like the United States, South Korea, and Japan have already pledged to strengthen chip partnerships with Vietnam, viewing it as a strategic alternative to China and Taiwan.

Despite the optimism, Vietnam faces several challenges, including a shortage of highly skilled semiconductor engineers, high initial investment costs for chip fabrication plants, and intense global competition from established chip giants like Taiwan, South Korea, and the U.S.

However, with government backing, private-sector investment, and a growing high-tech workforce, Vietnam’s semiconductor industry could become a key player in the global chip ecosystem by 2050.

Thai Khang