Vietnam’s semiconductor sector, despite the impact of Covid-19, is forecast to lure foreign investment thanks to its potential growth in the next five years, overseas insiders have said. 

Darfon Electronics' factory in Ha Nam Province. Photo: Darfon Electronics

At the Dong Van IV Industrial Zone, the northern province of Ha Nam, a keyboards manufacturing factory is under construction, which is the second investment of Taiwan-based Darfon Electronics, specializing in keyboards, passive components, and electric bicycles, in Vietnam.

Previously, the Taiwan maker has moved some of its notebook and desktop keyboard production at China-based facilities to its first and second factories, which are under construction in the south and north of Vietnam, according to the IT website Digitimes Asia.

The two facilities in the Vietnamese market will initially account for 20-30% of total keyboard production of Darfon Electronics.

In January, the Danang Hi-tech Park has authorized Silicon Valley-based supplier Hayward Quartz Technology to build its semiconductor plant United Enterprise worth a total of $110 million.

In the same month, Intel increased investment by $475 million in its Vietnam’s factory in Saigon Hi-tech Park. This takes Intel's total investment in Vietnam's facility to $1.5 billion since 2006.

According to Fitch Solutions, Vietnam's industrial parks still attract considerable foreign investment amid a resurgence of Covid-19 outbreaks, especially in the electronics industry. About 65% of foreign electronics companies choose to base in the north, while 30% go to the south. The rest chooses to settle in central Vietnam.

The country’s semiconductor industry is projected to grow by US$6.16 billion, progressing at nearly 19% compound annual growth rate (CAGR) in the 2020-2024 period, according to the market research firm Technavio. 

Technavio said the sector in Vietnam has dispersed only a few suppliers and could get more dispersed in the same period. Vietnam’s main vendors of the semiconductor industry include Broadcom, Hitachi, Intel, NXP, Qualcomm, Samsung Electronics, SK Hynix, STMicroelectronics, Texas Instrument, and Toshiba.

Hanoi - a potential destination for microchip

Hanoi is considered a potential destination for the microchip development as it is home to many research institutes and universities providing a highly-qualified and abundant workforce.

Investments in Hoa Lac Hi-Tech Park have helped form an initial ecosystem for technology fields, serving as a premise for the development of the semiconductor industry. Some domestic and foreign investors in the field of electronics and semiconductors are VNPT Technology Company, Viettel Telecommunications Group, and Noble Electronics Vietnam Co., Ltd.

The Hoa Lac Hi-Tech Park is one of three national high-tech centers in Vietnam. Two others are Danang Hi-tech Park in the central city of Danang and Saigon Hi-tech Park in Ho Chi Minh City.

Vietnam has issued many policies and legal instruments to create favorable conditions for investment and development of high-tech products, in which the field of semiconductors is the top priority. The semiconductor sector is deemed as a stimulator for many industries and as it is itself one of the high value-added industries from the national perspective.

As Internet-of-Things (IoT) devices become popular in the country, it will be an opportunity for the local chip industry as well as foreign suppliers, local insiders have said.