Hanoi (VNS/VNA) - The global chip race isheating up, and Vietnam should be able to raise its position on the globalsemiconductor manufacturing map as some leading corporations are investing inchip production in the country, local economists said.

Prof. Nguyen Mai, President of the Vietnam Association of Foreign Invested Enterprises(VAFIE), said the adverse impact of the COVID-19 pandemic andprolonged trade conflicts have caused a disruption ofsemiconductor supplies. Global companies involved in using semiconductorsto make smartphones, self-driving vehicles, artificial intelligence (AI)technology or data centers have been forced to cut their productivity.

Mai emphasied that countries are in a race to produce semiconductors andchips. In particular, the US Department of Commerce (DOC) in Septemberreleased its strategy for implementing its 50 billion USD CHIPS forAmerica programme. And China has doubled its spending and enacted policiesto support semiconductor manufacturing companies.

Vietnam has also become a centre of the semiconductor industry as Samsungannounced its plan to produce semiconductors from July next year with anadditional investment of 920 million USD. The country is also home to Intel’slargest assembly and testing factory with an investment of 1.5 billion USD.

Do Nhat Hoang, head of the Ministry of Planning and Investment's ForeignInvestment Agency, said the Synopsys company from the US also announcedthat it would train electrical engineers in Vietnam and support HCM CityHi-Tech Park (SHTP) to establish a chip design center through a softwaresponsorship programme.

Hoang added that in the first 10 months this year, FDI disbursement reached 17.45billion USD, an increase of 15.2% over the same period in 2021. Thiswas the highest number in the past five years. Of this figure, themanufacturing sector accounted for 65% and involved the major industriesof hi-tech electronics and chip production. This has shown that Vietnam hasgradually begun to form an ecosystem of semiconductor and chip production.

Over the years, Vietnam’s investment climate has been highly appreciated byforeign investors due to its stable political system and rapid growing economy.Incentives through corporate income taxes have also made an importantcontribution to creating an attractive investment climate.

Hong Sun, Vice President of the Korean Chamber of Commerce in Vietnam(KoCham),said that apart from having a stable business environment and manyincentives, chip manufactures want to have abundant and stable powersources.

Hong emphasied that chip or semiconductor manufacturing were both high-valueproducts. If a sudden power failure occurred, production would have torestart from the beginning, which would take from a week to a fewmonths and cost billions of dollars.

Mai said that “Vietnam should not rest on its gains and we needto make an assessment of the bottlenecks in luring FDI, such as transportinfrastructure, and information networks.”

He noted that if Vietnam can participate in the semiconductor industry, it willgenerate a big boost of added value for the country./.