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2023: A Boom in Tech Giants' Investments in Vietnam

2023: A Boom in Tech Giants' Investments in Vietnam - Created date15/11/2023

Leading global technology conglomerates are turning their attention to the Vietnamese market. In 2023, it is forecasted that Vietnam will become a major producer of crucial semiconductor devices needed worldwide.

Prof. Nguyen Mai, Chairman of Vietnam's Association of Foreign Investment Enterprises, assessed the FDI trend in 2022. He noted a significant global FDI flow into Vietnam, particularly highlighting the positive signal of high-quality FDI from top global investors choosing Vietnam as a manufacturing hub. This optimistic trend is expected to continue into 2023.

When asked about the investment outlook for Vietnam in 2023, amidst the global economic uncertainties, Prof. Mai shared insights, "Firstly, it's crucial to acknowledge the keen interest of leading global technology conglomerates in Vietnam. Not only Apple, but Microsoft, with Bill Gates allocating substantial funds for philanthropy, still recognizes Vietnam as a promising market and intends to invest resources in the country."

"Moreover, other tech giants like Foxconn and notably Intel are investing and collaborating with various U.S. technology companies to establish semiconductor production plants similar to those in Israel and the U.S."

In Ho Chi Minh City, Intel has been granted a $1.2 billion investment license for semiconductor chip production. This is Intel's third factory globally, alongside facilities in Scotland and Israel, and it is projected to supply 20% of the world's semiconductor chips by 2030. Prof. Mai anticipates a vibrant semiconductor manufacturing market in Vietnam in 2023, predicting the production of many essential semiconductor products for the global market. He also referenced a French article stating, "Invest in Vietnam for software and digital processing. Vietnam has the conditions for digital transformation and infrastructure development."

Similarly, Samsung is investing $1.5 billion in Vietnam, while LG is injecting an additional $1 billion. In Hanoi, the Industrial Zone Management Board granted a license to a Japanese company to produce components for Boeing, ship components, and Shinkansen parts, marking the beginning of a significant support business development in Vietnam. While FDI businesses investing in Vietnam are encouraging, concerns have been raised about transfer pricing. Recent data from the Ministry of Finance revealed that in 2021, 55% of FDI enterprises reported losses, an 11% increase from 2020. He acknowledged that external factors, such as the impact of COVID-19 and global political conflicts, have put many businesses, both foreign and domestic, in challenging situations. Therefore, a comprehensive analysis is required to differentiate between FDI businesses reporting losses due to objective difficulties and those engaging in transfer pricing.

Source: VnBusiness