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International companies boost chip packaging operations in Vietnam
Foreign companies are expanding capacity in Vietnam for testing and packaging chips while domestic firms are eyeing investments, executives said.
The semiconductor back-end manufacturing sector is less capital-intensive than more strategic front-end chipmaking in foundries, and Vietnam is among the fastest-growing countries in the $95 billion segment.
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A chip testing machine seen at an exhibition in Vietnam in October 2024. |
Hana Micron's vice president for Vietnam, Cho Hyung Rae, told Reuters the company was expanding in the Southeast Asian country to meet requests from industrial clients.
The South Korean company is investing about 1.3 trillion won ($930.49 million) until 2026 to boost packaging operations for legacy memory chips, a company official based in South Korea said.
U.S.-headquartered Amkor Technology announced last year a $1.6 billion plan to build a 200,000 square metre (2.2 million sq. ft) factory which it said would become its most extensive and advanced facility, "delivering next-generation semiconductor packaging capabilities."
A business executive with direct knowledge of Amkor's operation in Vietnam said some of the equipment installed in the new plant had been transferred from factories in China.
Amkor did not reply to requests for comment about the transfer of machinery.
Intel, which had a large booth last week at Vietnam's first international semiconductors exhibition near Hanoi, has in the country its largest chips back-end factory in its global network.
Vietnam's growth in the back-end segment of the chips industry has been encouraged by the Biden administration amid growing trade tensions between Washington and Beijing, which may further escalate with the second presidency of Donald Trump.
Thanks largely to the investments from foreign companies, Vietnam is expected to have by 2032 an 8% to 9% share of global capacity in chip assembling, testing and packaging (ATP), from just 1% in 2022, according to a report published in May by the U.S. Semiconductor Industry Association and Boston Consulting Group.
Local companies are also expected to contribute to the sector's forecast growth.
Vietnam tech firm FPT is building a testing factory close to Hanoi, according to three corporate sources, who declined to be named because the information was not public.
One source from the company said the 1,000-square-metre plant is expected to start operations early next year with 10 testing machines, to be tripled by 2026, for an investment of up to $30 million. It is still, however, seeking strategic partners.
FPT did not reply to a request for comment.
Vietnamese investment firm Sovico Group is also looking for a foreign partner to co-invest in an ATP facility in Da Nang, a coastal city in central Vietnam, said Le Dang Dung, a senior adviser to Sovico.
Vietnam is also aiming to become a player in front-end chipmaking.
Viettel, a state-owned defence and telecoms company, plans to build Vietnam's first foundry, two company sources said, to meet the government's ambitious goal of having at least one fab online by 2030.
The company did not reply to a request for comment.
An investment fund with total assets of 150 million USD was launched on October 28 to support technology and semiconductor start-ups in Vietnam and the region.
Vietnam is one of eight strategic countries selected for the US International Technology Security and Innovation (ITSI) Fund, which is designed to enhance semiconductor capabilities and strengthen the resilience of the global semiconductor supply chain.
Green, clean development and semiconductor chip production are among the sectors in Vietnam that foreign investors are interested in, according to VinaCapital CEO and Founding Partner Don Lam.
Although it is considered to be able to bring home billions of USD in revenue, the semiconductor industry in Vietnam still faces many challenges, especially the shortage of human resources.
Vietnam is well-positioned to welcome and cooperate with semiconductor and artificial intelligence (AI) enterprises and investors from around the world, Minister of Planning and Investment Nguyen Chi Dung told a seminar held in Hanoi on October 1.
Party General Secretary and State President To Lam attended a seminar on enhancing Vietnam-US cooperation in the development of the semiconductor and artificial intelligence (AI) industries in New York on September 22 as part of his attendance at the High-level Week of the 79th session of the UN General Assembly and working trip to the US.
Prime Minister Pham Minh Chinh has signed a decision issuing the strategy for developing Vietnam’s semiconductor industry by 2030, with a vision to 2050.
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