Inflows picking up the pace for semiconductors

July 08, 2024 | 14:00
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Semiconductors are heating up foreign investment inflows into Vietnam, and capturing a larger proportion of the total.

During the official visit to South Korea last week, under the witness of Prime Minister Pham Minh Chinh, Vice Chairman of Bac Ninh People’s Committee Vuong Quoc Tuan handed an investment certificate to Amkor Technology Singapore Holdings on factory adjustments for manufacturing, assembling, and testing semiconductor materials and equipment.

Inflows picking up the pace for semiconductors
Inflows picking up the pace for semiconductors, illustration photo/ Source:

Soon after putting the first phase project into operation, the semiconductor industry giant decided to raise its investment by $1.07 billion, the first billion-dollar foreign-invested project in 2024.

This was the highlight of foreign direct investment (FDI) as reported in the first half of the year as revealed by the Foreign Investment Agency under the Ministry of Planning and Investment (MPI).

Amkor’s additional registered investment in June has captured 47.3 per cent of the total additional investment in six months ($3.95 billion), an increase of 35 per cent on year, instead of continuously decreasing in previous months.

In the previous plan, Amkor intended to spend $1.6 billion by 2035, but after the inauguration last October, the company decided to carry out it as soon as possible. Amkor received the investment registration certificate in 2021 in South Korea with an investment of about $530 million, which is expected to be disbursed in five years.

Amkor is headquartered in the United States and founded by South Koreans, but invests in Vietnam through various legal entities in Singapore.

Semiconductors are heating up FDI inflows into Vietnam. “Despite being on a downtrend, global investment flows are still interested in Asia and into emerging industries, which will impact the FDI inflows into Vietnam. In the time coming, FDI into high-tech fields and semiconductor chips will get more dynamic,” said Luong Van Khoi, vice chairman of the Central Institute for Economic Management under the MPI.

The wave of investing in semiconductor chips has been speeding up since last year, when numerous US investors arrived in Vietnam and expressed their interest in semiconductors.

At the meeting with Minister of Planning and Investment Nguyen Chi Dung in the US at the end of June, Richard Lawton Thurston, former vice president of Taiwan’s TSMC, the largest semiconductor manufacturer in the world, said that Vietnam has a huge opportunity to develop the semiconductor and AI industry.

“AI development needs many different technologies, including sensors, memory, data collection, and processing. Therefore, Vietnam should choose one of the stages to focus on developing and building a strategy,” Thurston said.

Thurston has assisted many companies and governments in establishing and managing technology parks around the world. The MPI minister asked Thurston to share his experiences in developing the semiconductor industry in Vietnam, and provide recommendations for developing it, especially in terms of human resource development and investment promotion.

Minister Dung also asked Thurston to support connections, welcome TSMC to invest in Vietnam, and invite him to be an advisor to Vietnam in the semiconductor industry. Thurston declared he will cooperate and attempt to support the implementation of the minister’s proposals. He accepted the invitation to act as an advisor to Vietnam in developing plans and roadmaps for the semiconductor industry development.

The semiconductor industry produces electronic components based on semiconductors such as silicon, quartz, gallium arsenide, and other materials. The development of IT, telecommunications, AI, and self-driving cars has increased demand for semiconductor components.

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By Huong Ha

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