Vietnam will be the new factory of the world. Vietnam is asserting itself in the chip supply chain despite the global shortage of chips and fierce competition between major countries for manufacturing chip-semiconductors and developing microchip industries.
Samsung, the world’s largest supplier of DRAM products will invest 850 million USD in Vietnam for manufacturing flip-chip ball grid arrays.
In Vietnam, the electronics giant plans to open a Research and Development Center in Hanoi at the end of 2022 and beginning of 2023. This center will serve not only Vietnam but also Southeast Asia. The CIEM economists claim that Vietnam will become one of four countries producing semiconductors for the largest memory chipmaker in the world, alongside China, the Republic of Korea, and the United States.
They wrote that Vietnam’s choice over other developed countries speaks volumes about its growing importance in the semiconductor value chains.
Vietnam isn’t a newcomer in the semiconductor industry. Z181, the country’s first semiconductor factory, was established in 1979 for the production and export of semiconductor components to former Eastern European countries.
The two economists pointed out that Vietnam’s technology and industrial policies have provided the best incentives for high-tech projects. This includes a reduction in corporate income tax, sales tax, and exemption from land rent.
Vietnam has an advantage over its neighbours in the region because of its large pool of engineering talent that is relatively low-cost.
According to economists, more than 40% of Vietnamese university and college graduates major in engineering and science. Vietnam is among the top 10 countries that have the highest number of engineering graduates.