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Vietnam Strengthens Its Semiconductor Industry with New Chip Packaging Investments

Over the past couple of years, Vietnam has been slowly expanding into chip packaging and chip testing as global semiconductor investors seek an alternative route that does not solely rely on China. Increasingly rising tensions between China and Western nations in terms of trade are forcing the way out of China for these giants. Global players, including Hana Micron and Amkor Technology, will erect multibillion-dollar plants in Vietnam, providing new impetus for manufacturing in the country.

Investment Surges in Vietnam

South Korean Hana Micron will spend about 1.3 trillion won - or around $930 million - through 2026 to expand chip packaging for memory chips in response to industrial clients' requests for production outside China. 

Similarly, US-based Amkor Technology has committed $1.6 billion to build a new, 200,000-square-meter facility in Vietnam, the largest and most advanced manufacturing plant the company will ever have built. Reports indicate that Amkor has even transferred some of its equipment from its Chinese operations to the new facility in Vietnam.

Increasing Intel

Chip testing and packaging behemoth Intel has already established its largest back-end factory in Vietnam, further solidifying the country's status in this critical sector. Intel's entry strongly highlights the increasing appeal of Vietnam to back-end chip manufacturing.

Domestic Reassertion and Potential

Local companies FPT and Sovico Group are also fast on their way. FPT is building a new chip-testing plant outside the capital city of Hanoi and intends to continue expanding it up to 2026. 

The Sovico Group actively seeks a foreign partner to invest in an ATP facility in Danang. If the growth trend is maintained, Vietnam's share of global semiconductor packaging and testing by 2032 could reach 8% to 9%, up from 1% last year.

Vietnam's Ambition in Chip Production

While sharing a broader push, Vietnam also intends to dive into front-end chip production. The state-owned telecoms company Viettel has planned to build Vietnam's first chip foundry by 2030-a step that can be a turning point for the country in the semiconductor industry.