Foreign investors expand capacity in Vietnam for testing and packaging chips

The Government News on November 13 quoted Reuters as reporting that foreign tech giants are expanding capacity in Vietnam for testing and packaging chips.

The semiconductor back-end manufacturing sector, which is less capital-intensive than more strategic front-end chipmaking in foundries, but Vietnam is among the fastest-growing countries in the $95 billion segment.

Vietnam's growth in the back-end segment of the chips industry has been encouraged by the Biden administration amid growing trade tensions between Washington and Beijing, which may further escalate with the second presidency of Donald Trump.

Thanks largely to the investments from foreign companies, Vietnam is expected to have by 2032 an 8-9 per cent share of global capacity in chip assembling, testing and packaging (ATP), from just 1 per cent in 2022, according to a report published in May by the U.S. Semiconductor Industry Association and Boston Consulting Group.

Reuters quoted Hana Micron's Vice President for Vietnam, Cho Hyung Rae, as saying that the company was expanding in Vietnam to meet requests from industrial clients.

The Korean company is investing about $930.49 million until 2026 to boost packaging operations for legacy memory chips, a company official based in South Korea said.

U.S.-headquartered Amkor Technology announced last year a $1.6 billion plan to build a 200,000 square meter (2.2 million sq. ft) factory which it said would become its most extensive and advanced facility, "delivering next-generation semiconductor packaging capabilities."

A business executive with direct knowledge of Amkor's operation in Vietnam said some of the equipment installed in the new plant had been transferred from factories in China.

Intel, which had a large booth last week at Vietnam's first international semiconductors exhibition near Hanoi, has in the country its largest chips back-end factory in its global network.

Meanwhile, local companies are also expected to contribute to the sector's forecast growth.

Earlier, Vietnam set a target of some $25 billion a year in revenue from the semiconductor industry by 2030, according to the country's semiconductor development strategy until 2030, with a vision for 2050, issued by the Prime Minister.

The figure will soar to $50 billion a year during the 2030-40 period and US$100 billion between 2040 and 2050.