The ongoing trade war between the US and China, along with sanctions on Russian exports including the noble gases used in microchip manufacture, have led to supply shortages for the ever-growing tech industry.
Vietnam is in talks with semiconductor firms to set up the first microchip factory in the southeast Asian nation. But US tech industry leaders have sought to scotch the plan with claims it would be a waste of public money.
US micro giant Intel already has its largest testing and packaging plant in Vietnam, but the socialist republic is seeking to persuade companies to build high-tech manufacturing plants there.
Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council, told media that meetings with half-a-dozen US chipmakers had taken place in recent weeks.
The Vietnamese government said on Monday that semiconductor firms would be offered “the highest incentives available in Vietnam” to set up shop there.
But speaking at the Vietnam Semiconductor Summit in the capital Hanoi on Sunday, US chip design and tool maker Synopsys Vice-President Robert Li warned the government against offering subsidies to tempt manufacturers in.
He said the cost of building a new ‘fab’ or chip factory could be as high as $50 billion. He added that Vietnam would have to compete with neighboring China and South Korea, as well as the US and European Union for investment, each of which has announced spending of between $50 and $150 billion on increasing semiconductor production.
US Semiconductor Industry Association President John Neuffer told the same industry convention that Vietnam should focus on the assembling, packaging and testing aspects of the sector, where it already had a presence.
Hanoi’s expansion plan follows warm words from US President Joe Biden on his visit in September, when he called Vietnam a “critical player” in the microchip supply chain that has been left vulnerable by Washington’s sanctions war against both China and Russia.
Cayman Islands-based chip firm GlobalFoundries was among industry players who attended a closed-door business summit in Vietnam at the same time as Biden’s visit, but has reportedly shown no further interest in investing there. “We do not comment on market rumors,” said a GlobalFoundries spokesperson.
