Amid US-China trade tensions, numerous global businesses, like South Korea’s Hana Micron and US-based Amkor Technology, are establishing centres in Vietnam to diversify their manufacturing bases.
Cho Hyung Rae, Hana Micron’s vice president for Vietnam, told Reuters that the company was expanding in Southeast Asia to answer requests from industrial clients who wanted to relocate some manufacturing capacity away from China.
China and Taiwan now dominate the semiconductor back-end manufacturing sector, which is less capital-intensive than more strategic front-end chipmaking at foundries; nonetheless, Vietnam is one of the fastest-growing countries in the $95 billion segment.
The United States has promoted Vietnam’s strategic push into the semiconductor sector, perceiving it as a viable supply chain alternative to China.
The Biden administration’s backing, particularly as trade tensions rise, has strengthened Vietnam’s position in this industry.
With both domestic and foreign investments, Vietnam is prepared to solidify its position as a significant participant in the global semiconductor back-end market.
Hana Micron has committed more than $930 million to expand its packaging capacity, while Amkor is investing $1.6 billion to build its largest packaging plant, relocating some machinery from its Chinese facilities.
The increase in investment is expected to boost Vietnam’s global share in chip assembly, testing, and packaging, with predictions ranging from 1% in 2022 to 8-9% by 2032.
Domestic companies are also ramping up. FPT, a Vietnamese technology firm, aims to invest up to $30 million in a testing facility outside Hanoi next year, while Sovico Group is looking for partners for a chip plant in Danang.
We earlier reported that the Biden-Harris administration announced plans to offer Wolfspeed up to $750 million in direct funding to assist its new silicon carbide facility in North Carolina, which produces wafers used in advanced computer circuits, as well as its Marcy, New York factory.
