Vingroup offers incentive for semiconductor manufacturers

Vingroup offers incentives for semiconductor manufacturers

Pham Nhat Vuong, chairman of Vingroup, said at the annual shareholders' meeting organised on May 11 that “It is a golden time for VinFast to expand its share in the domestic market and abroad, however, it is still challenging to source semiconductors.”

“At present, there is a significant shortage in supply. We can not export products if they lack just a few of the approximately 40,000 parts and semiconductors that are required in a car. VinFast has to import some components from China, however, Shanghai is closing its gates due to the zero-covid policy and the chip manufacturers located there have been forced to halt their operations, causing disruption in the supply of chips around the globe,” Vuong said.

The group has established a list of six groups of parts and materials for battery cell production and studied solutions to prepare long-term reserves of these products. The group’s main focus at present is looking for suppliers of raw materials to order a large volume for the long term.

“Faced with this situation, Vingroup has set a target to foster a strategy to localise chip production. The group is calling on automobile chip manufacturers to invest in its industrial parks (IPs) and the group is willing to accept site rental fees for them for up to 15 years,” Vuong said.

At present, its electric vehicles' localisation ratio is approximately 60 per cent and the group expects to increase this figure to 80 per cent.

Vingroup is proposing a $400 million IP project in the central province of Ha Tinh's Vung Ang Economic Zone (EZ). Construction covers an area of just over 1,000 hectares with a 70-year lifespan and is set to complete next year.

By the third and fourth quarters of this year, it will begin multiple projects in a 2,000ha complex in the zone, including the $11 billion VinFast auto factory and facilities to make auto parts and hi-tech audio-visual equipment.

“We call on investors who develop parts and chips for electric cars and buses to invest in our IPs,” Vuong concluded.

In December, Vingroup began construction of the VinES battery manufacturing factory in Vung Ang EZ. The establishment of this factory, which has the total investment capital of $174 million, represents an important milestone in VinFast’s strategy for the self-production and supply of batteries that meet global standards for its electric vehicles.