Recently, Vietnam’s semiconductor industry has attracted a substantial amount of foreign investment, highlighting the country’s growing significance in the global technology supply chain and the complex interaction between geopolitics, technological development, and environmental sustainability.

In the context of ongoing U.S.-China trade tensions, Vietnam has emerged as one of the preferred destinations for global technology companies seeking to mitigate risks. The South Korean Young Poong Group’s subsidiary, Signetics, recently announced a $100 million investment in a factory in Vinh Phuc province, northern Vietnam, with plans to start production by the end of 2025. This decision not only reflects Vietnam’s favorable investment environment but also underscores how global companies are adapting their strategic layouts in response to geopolitical shifts.

Although it does not directly produce chips, U.S.-based 3M recently established a technology center in Hanoi, signaling Vietnam’s rising importance in the global semiconductor ecosystem. Amit Laroya, Senior Vice President of 3M’s Asia Transportation and Electronics Business Group, highlighted that Vietnam, as the fastest-growing electronics market in Southeast Asia, is increasingly drawing attention from numerous foreign companies within the semiconductor ecosystem.

Vietnam’s role in the semiconductor value chain is steadily rising. In June of this year, Amkor Technology, a U.S.-based semiconductor company, received an investment license for its plant in Bac Ninh province, northern Vietnam, and increased its total investment to $1.6 billion. This move not only marks Vietnam’s first major semiconductor deal in 2024 but also further solidifies the country’s position in the global semiconductor supply chain.

Richard Lawton Thurston, former Vice President of TSMC (Taiwan Semiconductor Manufacturing Company), emphasized that Vietnam holds significant opportunities in the development of the semiconductor and AI industries. He suggested that Vietnam should focus on specific segments such as sensors, storage, data collection, and processing, and develop targeted strategies. His recommendations reflect the potential Vietnam has in achieving technological breakthroughs and advancing industrial upgrades.

As the semiconductor industry in Vietnam rapidly expands, concerns over environmental protection and sustainability are also becoming more prominent. Although not directly mentioned in the news, environmental issues are an essential aspect of semiconductor industry development that cannot be overlooked.

The Vietnamese government needs to balance attracting foreign investment and promoting economic growth with establishing strict environmental standards and sustainable development policies. This includes encouraging companies to adopt clean energy, enforcing stringent wastewater and emissions standards, and promoting green manufacturing technologies.

For instance, the government could require new semiconductor plants to use state-of-the-art energy-saving technologies and pollution control measures. Additionally, a dedicated fund could be established to support domestic enterprises in developing and implementing clean production technologies.

The rise of Vietnam’s semiconductor industry is the result of the combined forces of geopolitics, technological innovation, and sustainable development. As Vietnam continues to attract foreign investment and enhance its technological capabilities while building a more comprehensive semiconductor ecosystem, finding the right balance between economic growth and environmental protection will be a key challenge. This will require collaborative efforts from the government, businesses, and society to ensure that Vietnam’s semiconductor industry not only experiences rapid growth but also contributes to the country’s long-term sustainable development.

Vietnam’s semiconductor industry is currently experiencing an unprecedented investment surge, reflecting a major shift in the global technology supply chain.

Recent Investment Highlights:

• South Korea’s Signetics announced a $100 million investment in a factory in Vinh Phuc province, expected to begin operations by the end of 2025.
• U.S. company 3M has established a technology center in Hanoi, targeting Vietnam’s rapidly growing electronics market.
• U.S. company Amkor Technology is increasing its investment in Bac Ninh province to $1.6 billion, making it the largest single investment in Vietnam’s semiconductor sector in 2024.

Our expert advisory team specializes in guiding businesses through the complexities of entering the Vietnamese market. To learn more about expanding into Vietnam, you can directly contact our Vietnam market expert, Jaycy.