Industry News

Semi-Conductor production industry: Vietnam – a best place for investment

Semi-Conductor production industry: Vietnam – a best place for investment - Created date08/10/2022

Overview of the semiconductor production industry in Vietnam

According to market research released by Technavio, the world’s leading technology research and consulting company, the semiconductor market in Vietnam is expected to grow by $1.65 billion at a compound annual growth rate, of about 6.52% in the period of 2021 – 2025.

In fact, over the past 10 years, there have been many foreign enterprises investing in the field of microelectronics such as Intel Corporation, Jabil, Sonion, Datalogic, and GES… in Ho Chi Minh City High-Tech Park.

Legal Framework for Semiconductor

Decision No. 439/QD-TTg dated April 16, 2012, approves the “List of national products implemented from 2012 under the National Product Development Program to 2020”, which identifies and specifies “semiconductor” as one of the 9 key development products of the country.

The Government also issued Decision No. 66/2014/QD-TTg on “List of high technologies prioritized for development investment” and “List of high-tech products encouraged for development”, in which specifies technologies for designing and manufacturing semiconductor and semiconductor devices on the list of hi-tech prioritized for development investment and the list of hi-tech products encouraged for development.

Why Vietnam?

As time passed by, more international organizations shifted their production to Vietnam due to its strategic location and advantages in shipping, competitive labor, and production costs. Most recently of all, it is because enterprises in Vietnam can reap various benefits under 13 free trade agreements that Vietnam is a signatory. Vietnam has one of the most numerous FTAs in the world – and most in the region. Singapore has only 6 FTAs, and Malaysia has only 7.

Most recently and notably, the EU-Vietnam Free Trade Agreement (EVFTA) and the CPTPP grant favorable market access and investment conditions for foreign investors wishing to do business in Vietnam. For example, under the Agreements’ tariff schedule, the base rate is 0% for almost all products in the semiconductor manufacturing sector.

Based on all the facts stated above, it is apparent that Vietnam is an ideal destination to carry out semiconductor manufacturing.

Source: vn-eu-tradehub