Bac Giang makes its play for investment in semiconductors

March 14, 2024 | 10:05
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Vietnam is hoping to emerge as a top market for semiconductor production. Luong Van Nghiep, deputy director of Bac Giang Department of Planning and Investment, told VIR’s Minh Oanh about the northern province’s potential and its strategies to draw in foreign investors in the sector.

What potential does the province have in terms of the global semiconductor production chain?

Bac Giang makes its play for investment in semiconductors
Luong Van Nghiep, deputy director of Bac Giang Department of Planning and Investment

In the past, many multinational groups selected Vietnam as a hub to produce chips and semiconductors, such as Hana Micron Vina and Amkor. Many other investors are also looking at opportunities, such as Nvidia. The agreement to upgrade the relationship between Vietnam and the United States to a comprehensive strategic partnership is also a milestone to promote the cooperation in the semiconductor production sector in Vietnam.

It is a huge opportunity for Vietnam, and Bac Giang in particular, to participate deeply in the global chip and semiconductor production value chain in the near future.

To hold opportunities, the province has built methodical promotion strategies, which the province determined, to make semiconductor production a key industrial sector. In addition, instead of waiting for investors, Bac Giang is proactive in going abroad to approach them in prominent markets such as the US, South Korea, Japan, and Singapore.

The province has also prepared clear land sites, human resources, as well as transport and industrial infrastructure to meet demands.

Bac Giang has made strong moves in terms of improving its business environment through various resolutions and directives over recent years. Furthermore, the province also established a steering committee for support and business environment improvements to provide support from the first stage of investment.

Many foreign investors like Hana Micron Vina are considering Bac Giang a good investment destination. Why do they do that?

Along with the aforementioned factors, the province has a geographical location with a diverse, synchronous, and modern developed transportation network for regional links.

Bac Giang is a northern province. Hence, it is quite near the rare earth mine, which is an important material to produce semiconductor products. With key foreign-invested projects, such as Hana Micron Vina, the province established a task force, led by a vice chairman of the people’s committee and the leaders of local departments, to support investors during the process, from researching the business climate, through to completing all procedures and during the operation process.

For example, financial backers often face problems relating to the procedures to get the fire safety certification or the approval of the environmental impact assessment report. However, at Bac Giang, key investors receive advice and support, so that the approval procedure goes smoothly.

The task force works with the investors every day, every week to meet their demands and also resolve their issues. At Hana Micron Vina, the company faced a problem relating to connection with the power grid for their expanded facilities. However, the task force was eager to resolve its issue in a short time to ensure the project’s success. Furthermore, the task force quickly allocated available land for Hana Micron Vina’s expansion.

We also determined that on-site investment promotion was also significant. Hana Micron Vina was an outstanding case. The company entered Bac Giang for the first time in 2019 with initial funding of over $100 million, and the group adjusted the licence to expand their operation for several times, showing their trust in the province’s investment environment.

How will the group help pave the way to lure other large manufacturers in the same field?

Hana Micron Vina has plans to increase its total investment in the province to $1 billion by 2025. The province and the task force will continue to accompany the group in supporting investors to speed up the implementation of procedures to import machinery and equipment for production, and other procedures to receive full benefits and incentives, according to the provisions of law to ensure the disbursement schedule.

Hana Micron Vina’s semiconductor manufacturing factory project is one of the key projects with particularly important significance for the socioeconomic development of Bac Giang. The effective and smooth implementation of the project will be the foundation for the development of the semiconductor manufacturing ecosystem in the province and in the north in general. This is also an opportunity to create momentum for Bac Giang to bring in more high-tech semiconductor projects.

What should the government do to make localities more favourable to semiconductor investors?

Vietnam is estimated to have large rare earth reserves, ranking second in the world with about 22 million tonnes, which is a huge advantage for the country. However, the government also needs to have a specific plan and select mining and processing investors with capacity, technology, and experience to exploit and deeply process this resource.

In this way, it will help to improve economic efficiency, as well as create advantages for Vietnam with this special important mineral resource.

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By Minh Oanh

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