Hanois Drive Towards Becoming Southeast Asias Semiconductor Powerhouse

Jakarta, INTI - Hanoi, the vibrant capital of Vietnam, is embarking on an ambitious journey to position itself as a leading semiconductor production hub in Southeast Asia by 2050. This strategic endeavor aligns with Vietnam's National Master Plan for 2021-2030, with a visionary outlook extending to 2050. At its core, the plan aims to propel Vietnam into the ranks of upper-middle-income nations by 2030, driven by advancements in science, innovation, technology, and digital transformation.

The semiconductor industry stands as a linchpin of the global economy, with sales surpassing US$500 billion in 2022 and projected to exceed US$1 trillion by 2030. Against the backdrop of escalating US-China trade tensions and surging global chip demand, Vietnam emerges as a promising candidate for semiconductor manufacturing. Already among the world's top 10 exporters of semiconductor devices and integrated circuits, Vietnam anticipates sustained industry growth, projected at six percent annually until 2027.

In 2023, Vietnam ranked third in semiconductor exports to the U.S., trailing only Malaysia and Taiwan, with exports valued at US$562 million, a notable increase from US$321 million in 2022. The country has attracted significant investments from global semiconductor giants such as Samsung, Infineon Technologies AG, and Nvidia, demonstrating its appeal as a semiconductor production destination.

Hanoi, endowed with strategic locational advantages and a robust investment environment, emerges as a focal point in Vietnam's semiconductor ambitions. Situated within the dynamic Red River delta, Hanoi serves as a nexus for political, economic, and scientific activities, bolstering its appeal to investors. The city boasts a formidable track record in attracting foreign direct investment (FDI), with inflows reaching US$1.7 billion in 2022, positioning it among Vietnam's top seven FDI destinations.

Moreover, Hanoi is committed to enhancing its infrastructure landscape to facilitate business operations and lower costs for investors. Extensive infrastructure projects, encompassing expressways, highways, and radial roads, underscore the city's dedication to fostering a conducive investment climate. By 2030, Vietnam aims to construct thousands of kilometers of new expressways, high-speed rail routes, and deepwater ports, amplifying connectivity and accessibility.

Vietnam's government has unveiled a suite of incentives to entice semiconductor companies to establish and expand operations in the country. These incentives encompass tax breaks, industry grants for research and development, and initiatives to address the shortage of skilled engineers. With plans to train 50,000 engineers by 2030, Vietnam aims to fortify its semiconductor talent pool and enhance its competitiveness in the global semiconductor arena.

Hanoi, in particular, prioritizes incentives targeting investments in high-tech, clean-tech, and environmentally friendly sectors. Industrial enterprises in the city enjoy corporate income tax exemptions and reduced rates, alongside exemptions on import duties for certain projects. These policies, coupled with Hanoi's burgeoning industrial zones, underscore the city's commitment to fostering innovation and sustainable development.

As Hanoi embarks on its quest to emerge as a semiconductor powerhouse, it confronts a spectrum of opportunities and challenges. The evolving landscape of the global semiconductor industry, coupled with geopolitical dynamics, will shape Hanoi's semiconductor ecosystem in the years ahead. Proactive government support, coupled with targeted incentives and investments in talent development, will be pivotal in realizing Hanoi's semiconductor ambitions and propelling Vietnam's position on the global stage.