Vietnam: The Surprising Winner in the Chip War Between Washington and Beijing

 

Chips

Vietnam: The Surprising Winner in the Chip War Between Washington and Beijing

Amid escalating trade tensions between the US and China, Vietnam is emerging as a new and unexpected player in the global semiconductor race, becoming one of the most prominent beneficiaries of recent geopolitical and technological shifts.

With US President Donald Trump tightening tariff restrictions on China, tech giants have been quick to seek safe and reliable alternatives.

Vietnam has been at the forefront of these options, leading to a significant jump in demand for its factories specializing in the manufacture of chip components and circuit boards.

A surge in demand and accelerated investment

Among these companies, Fab-9 stands out, registering a 20% increase in demand for its products after Trump threatened to impose steep tariffs on Chinese imports.

According to company president Bert Arokan, they are "very busy holding international conferences and showcasing their products, which are already surprising customers in Europe and Asia."

Vietnamese companies are now racing to expand their factories, while the government is working on a national semiconductor strategy that includes establishing the first domestic manufacturing plant, 100 chip design companies, and 10 packaging factories by 2030.

Local Investment and Returning Expertise

Vietnam has not only attracted foreign investment but has also seen the return of its engineers who gained experience at major global technology companies such as TSMC, Samsung, and Synopsys, some of whom have established chip design and packaging companies in the country.

Among these initiatives is the $72 million semiconductor packaging laboratory being implemented by VSAP Lab in Da Nang, with a production capacity of up to 10 million products annually.

Challenges Persist

Despite these qualitative leaps, past experience warns against excessive optimism. For example, Malaysia has hosted factories for global chip companies for decades, but has yet to establish a world-class local manufacturing facility.

Analysts believe that achieving self-sufficiency in the chip industry requires careful strategies, structural reforms in the education system, scientific research, and startup funding.

Government Support and Reforms to Attract Investment

In response to these challenges, Vietnam has begun implementing broad reforms that place technology and the private sector at the heart of its new economic strategy.

Last June, the country announced its first free trade zone in the coastal city of Da Nang, which has become a hub for high-tech industries and is now home to 23 chip design companies, despite previously having only nine.

Local companies like Vietnam Wafer and FPT are expanding their infrastructure for high-purity raw material production, wafer assembly, and testing, seeking to prove that Vietnam is capable of transforming from a mere assembly plant into an integrated high-tech manufacturing hub.

Commenting on the accelerating movement in the Vietnamese technology sector, Arukan said, "It's like Silicon Valley 55 or 60 years ago. We're at the beginning of the transformation, but it's very promising."

While the technology war between major powers continues, Vietnam appears to have found its golden opportunity to break into one of the world's most strategic industries.