On July 28, 2026, Vietnamese Prime Minister Pham Minh Chinh officially signed the National Semiconductor Development Strategy to 2030 (hereafter referred to as the Strategy), explicitly aiming to transform Vietnam into a global center for semiconductor manufacturing, packaging, and testing by 2030, targeting $50 billion in investment with local enterprises accounting for at least 30%. The launch of this strategy marks another important Southeast Asian economy joining the chip investment race, once again prompting investors to deeply reflect on the core question: "Why invest in chips?"
1. Core of Vietnam’s Strategy: Full Industry Chain Layout from Assembly to Manufacturing
According to the Strategy document, Vietnam plans to advance in three phases:
- Phase 1 (2026-2028): Focus on building chip packaging and testing plants, attracting the world's top 10 OSAT companies to set up bases, while launching a local IC design talent training program targeting 50,000 engineers.
- Phase 2 (2028-2030): Introduce mature process wafer foundries, prioritize development of 28nm and above processes, and establish a semiconductor equipment manufacturing industrial park.
- Phase 3 (After 2030): Achieve localized production of advanced processes below 14nm and build a national-level semiconductor R&D laboratory.
To achieve these goals, the Vietnamese government will offer tax incentives including a corporate income tax "4-year exemption and 9-year half reduction" (i.e., full exemption for the first 4 years, half reduction for the next 9 years), establish a total government-guided fund of $10 billion, and promise to simplify foreign investment approval processes. Additionally, Vietnam plans to sign bilateral semiconductor cooperation memorandums with South Korea, Japan, and the US to ensure smooth technology transfer channels.
2. Why Vietnam? Multiple Driving Forces for Southeast Asia Chip Investment
Vietnam is not the first Southeast Asian country to issue a chip strategy. Previously, Thailand launched a 200 billion baht chip incentive program, while Malaysia attracted global giants with its long-established packaging and testing industry in Penang. However, Vietnam’s unique advantages include:
1. Geographic and Labor Dividend
Vietnam borders southern China, has a 3,260 km coastline, facilitating equipment and raw material imports. Its population in 2025 is about 103 million, with a median age of only 31. Over 600,000 college graduates are added annually, with about 35% in STEM fields. Labor costs are only 60% of China’s and 40% of Malaysia’s, making it highly attractive for labor-intensive segments like packaging and testing.
2. Policy Stability and Upgrades
Over the past five years, the Vietnamese government has elevated the chip industry to a "national strategic priority" and established a cross-departmental semiconductor coordination committee. The Investment Law amendment passed in 2025 allows foreign enterprises to operate wholly owned in specific high-tech fields, with land lease terms up to 70 years. The current Strategy upgrades policy support to legal guarantees, reducing long-term investment uncertainty.
3. Natural Successor for Supply Chain Regionalization
US-China tech competition drives "de-risking" of the global chip supply chain, making Southeast Asia the preferred alternative region. Vietnam maintains good relations with both the US and China. In 2025, its exports of chip-related products to the US grew 47%, while imports of equipment from China grew 32%. This balanced diplomacy enables it to attract investments from both sides of the strait and from Europe. In the first half of this year, Vietnam attracted an additional $3 billion from Samsung Electronics to build an advanced packaging plant in Ho Chi Minh City, and Intel also plans to shift some testing lines from Malaysia to Vietnam.
3. From Vietnam: Three Core Investment Logics for "Why Invest in Chips"
Vietnam's strategy is not only a national-level plan but also reflects the core logic of global chip investment. For investors, the following three points merit long-term attention:
Logic 1: Long-term growth in chip demand is irreversible
According to the World Semiconductor Trade Statistics (WSTS), the global semiconductor market is forecast to exceed $700 billion in 2026, up 12.5% year-on-year. Drivers include: 40% annual growth in AI server shipments, chip value per electric vehicle reaching $1,000, and 5G/6G base station construction. The packaging, testing, and mature processes targeted by Vietnam's strategy are currently the most in-demand segments — TSMC and UMC foundries have over 95% capacity utilization for 28nm, with some orders scheduled into 2028.
Logic 2: Policy dividends are short-term catalysts
From the US CHIPS and Science Act to the EU Chips Act, and subsidy programs in India, Thailand, and Vietnam, governments worldwide are spending tens of billions of dollars in real money to attract chip investment. For example, Vietnam's corporate income tax reduction effectively lowers operating costs by 15%, and combined with labor advantages, total costs for packaging companies can be 40% lower than in Europe or the US. These policy dividends will continue to be released over the next 3-5 years, directly benefiting related companies (especially equipment suppliers and OSAT service providers).
Logic 3: Supply chain restructuring creates regional opportunities
The chip supply chain is shifting from highly concentrated to geographically dispersed. McKinsey reports that by 2030, Southeast Asia's share of global chip manufacturing capacity will rise from the current 8% to 15%. Vietnam, Thailand, Malaysia, and other countries are forming a "packaging + assembly" industrial cluster, while Taiwan, China and South Korea focus on advanced processes. This division offers investors diverse choices: betting on the stability of mature processes or the explosiveness of advanced technologies.
4. Risks and Challenges: What Should Investors Watch Out For?
Despite the attractive prospects, Vietnam's semiconductor strategy faces three major challenges:
- Talent shortage: Currently, Vietnam has fewer than 10,000 semiconductor engineers, far from the target of 50,000, and the global chip talent war has become white-hot.
- Infrastructure bottlenecks: Vietnam's power supply is tight; in 2025, large-scale power cuts occurred, while wafer fabs demand extremely high power stability.
- Technology catch-up difficulty: From packaging and testing to wafer manufacturing, technical barriers are extremely high. Vietnam lacks domestic supply of manufacturing equipment and chemical materials, and reliance on imports will increase costs.
However, as the Strategy emphasizes "easy first, difficult later," Vietnam's choice to start with packaging and testing and gradually penetrate manufacturing aligns with the industry gradient transfer pattern. For investors, focus can be placed on OSAT companies with capacity in Vietnam (e.g., ASE Group, Amkor), equipment suppliers (e.g., Applied Materials, Tokyo Electron), and Vietnam-related ETFs. Amid the dual waves of US-China rivalry and the AI revolution, "investing in chips" is not only a bet on the future but also deep engagement in the reshaping of the global semiconductor landscape.
Vietnam's strategy is just one piece of the global chip investment puzzle. From India to Thailand, from the US to Europe, countries are weaving a larger net with policies and capital. And Southeast Asia is becoming one of the most active nodes on that net.
