Vietnam is stepping up efforts to bolster its semiconductor sector by offering tax breaks and perks to attract major companies and stimulate local development.
According to Nikkei Asia, Hanoi's Minister of Science and Technology, Huynh Thanh Dat, revealed plans to enhance the semiconductor industry, aiming to position Vietnam as a crucial player amidst the China-US chip war.
Key initiatives are said to include tax incentives, industry grants, and collaboration with private firms like FPT, the largest information technology service company in Vietnam. Big players such as Nvidia and Samsung have already shown interest in expanding operations in Vietnam. The country is expected to receive millions from the US CHIPS and Science Act and already hosts Intel's biggest global test and assembly factory.
"Hanoi is signaling its dedication to the industry by adding it to two state programs, according to Dat. One is the National Fund for Science and Technology Development, which offers grants and other support. The second is the National Product Program, a coordinated effort to create 10 competitive products by 2030, including for export from Vietnam," the report added.
Despite facing challenges like low localisation rates and limited R&D synchronisation, Vietnam is determined to become competitive in the global semiconductor market.
The move comes as Vietnam seeks to attract investments that have gone to other countries, such as Malaysia. The US sees Vietnam's potential as a semiconductor hub.
Vietnam plans to train 50,000 engineers by 2030 and is encouraging technology transfer agreements. Educational institutions are partnering with industry leaders to equip students with needed skills.
As the tech race between the US and China heats up, Vietnam emerges as an attractive destination for semiconductor manufacturing.
In December 2021, India also approved a production-linked incentive (PLI) scheme for the semiconductor and display manufacturing ecosystem with an outlay of $10 billion. The move is aimed at fostering self-reliance and positioning the country as a global leader in Electronic System Design and Manufacturing (ESDM).
Projections indicate that India's semiconductor component market could soar to $300 billion in cumulative revenues by 2026.
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