Significant Shift in the Global Semiconductor Supply Chain: Vietnam Ready to Take a Strategic Position

Jakarta, INTI  - The global semiconductor industry, which is a cornerstone of modern technology, is currently undergoing a significant transformation due to geopolitical tensions and increasingly complex global economic dynamics. One country that is enhancing its role in this industry is Vietnam. The country has now become a key player in the semiconductor sector, particularly in the testing and packaging (back-end manufacturing) segment, which plays a crucial role in the global semiconductor supply chain.

Semiconductors, the small chips that power devices ranging from smartphones to advanced military equipment, have become the focal point of international competition. Trade disputes between major countries like the United States and China have spurred countries in Asia, including Vietnam, to restructure their positions in the semiconductor industry in order to reduce dependence on specific countries and increase technological independence.

Vietnam as a Key Player in the Semiconductor Industry

Vietnam, although it has just begun its long journey in the semiconductor industry, is now predicted to see significant growth in its contribution to chip packaging, testing, and assembly (ATP) capacity. A report published by the Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG) states that by 2032, Vietnam is expected to control 8% to 9% of the global capacity for chip packaging and testing, a significant increase from just 1% in 2022.

Vietnam's increasing role in this industry is attributed to the large investments flowing in from international companies seeking alternative production bases outside China. Vietnam offers advantages in terms of competitive labor costs and government policies that support foreign investments.

Vietnam also has ambitious plans to expand its semiconductor manufacturing capacity, targeting to have one small-scale chip production plant and 10 packaging, testing, and assembly (APT) plants by 2030. This move demonstrates Vietnam's commitment to becoming a semiconductor manufacturing hub in the Asia-Pacific region.

Major Investments in Vietnam's Semiconductor Industry

Several leading semiconductor companies have announced substantial investments in Vietnam. For example, Hana Micron, a South Korean company, is investing US$930 million through 2026 to enhance its legacy memory chip packaging operations in the country. With demand from clients looking to shift their production capacity from China, Hana Micron hopes to significantly expand its chip packaging capacity.

In addition, Amkor Technology, a US-based company, has announced a US$1.6 billion investment to build a 200,000-square-meter facility in Vietnam, which will become the company's largest and most advanced chip packaging plant.

Intel, one of the biggest players in the semiconductor industry, has also been operating its largest chip packaging plant in Vietnam and introduced the latest technologies at this facility. At the first international semiconductor exhibition in Vietnam, Intel showcased its commitment to the country's semiconductor market.

The Role of Domestic Players in Vietnam's Semiconductor Growth

Not only international companies are driving the growth of Vietnam’s semiconductor industry, but domestic players are also actively involved. FPT, a Vietnamese technology company, has built a chip testing plant near Hanoi, with an initial capacity of 10 testing machines, and plans to double its capacity by 2026. This investment is expected to reach US$30 million.

The Future of Vietnam's Semiconductor Industry

With all the steps and investments being taken, the future of Vietnam’s semiconductor industry looks very promising. Vietnam is not only serving as a hub for global companies looking to reduce their dependence on China, but it also has the potential to become a dominant force in chip packaging and testing, which are critical segments of the global semiconductor supply chain.

In the years to come, Vietnam will likely become a central hub for semiconductor manufacturing, competing with other major countries and bringing positive impacts to its economy while strengthening its position in the global semiconductor industry.