Vietnam is reportedly talking to several chip companies to build its first semiconductor plant and boost investment in the country.

Citing two business executives yesterday (30 October), Reuters reported that officials have met with half a dozen US chip firms in the past few weeks, including with Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council.

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According to one executive consulted by Reuters, the government in Hanoi is looking to build a plant for less advanced chips used in cars or telecom applications.

The Vietnamese government has said it wants to build its first plant by the end of this decade and added on Monday that chip companies would benefit from “the highest incentives available in Vietnam”.

The move to attract chipmaking investors comes after a surge in FDI inflows in the country. According to national statistics, Vietnam attracted over $15.29bn in FDI between January and October 2023, marking a 54% year-on-year increase in the value of investments. Around $5.29bn was spent on 1,051 existing projects.

In recent months, Vietnam has pulled in significant interest from investors who are looking to diversify their supply chains away from China. As a result, a growing number of investment projects have been announced in the Southeast Asian country, including a promise from Taiwan-based electronics contract manufacturer Foxconn to invest $200m to build a new plant in Vietnam’s Quang Ninh province.

According to GlobalData, in 2022, Vietnam, Malaysia and the Philippines witnessed strong foreign direct investment (FDI) growth as Western companies’ interest in China subsided.

Because of that, the three countries saw a combined 61.3% year-on-year increase in FDI levels in 2022, with the number of FDI projects almost doubling in that year compared to 2021.