Industry executives have noted that due to ongoing trade tensions, foreign companies are increasing their chip testing and packaging capabilities in Vietnam. Several chip manufacturers are establishing and expanding their facilities in the country, marking a shift in the global semiconductor supply chain.
Korean company Hana Micron has announced plans to invest 1.3 trillion Korean won (approximately 6.695 billion yuan) in Vietnam by 2026 to expand its traditional memory chip packaging business. Meanwhile, U.S. company Amkor Technology plans to invest $1.6 billion in a 200,000 square meter facility in Vietnam, aimed at achieving next-generation chip packaging capabilities. Some of the equipment for this new factory has reportedly been shipped from China. Additionally, Intel has already set up a plant in Vietnam, which stands as its largest chip backend facility globally.
A report from the U.S. Semiconductor Industry Association and Boston Consulting Group suggests that Vietnam is significantly benefiting from foreign investments. By 2032, Vietnam's share in global chip assembly, testing, and packaging capacity is expected to rise from 1% in 2022 to 8-9%.
Currently, companies from mainland China and Taiwan hold over 60% of the global chip assembly and testing market share. In contrast, the U.S. is represented primarily by Amkor Technology, which accounts for about 14% of the global market share. This industry distribution has raised concerns in the U.S., prompting efforts to relocate packaging operations to Vietnam as part of a strategy to decouple from China.
Amid escalating trade tensions between Washington and Beijing, the Biden administration is encouraging Vietnam's growth in the semiconductor industry. However, with the potential return of the Trump administration, these tensions might further escalate. Attempts to forcefully exclude China from the supply chain have met with industry discontent.
During an electronics conference in Munich, Germany, CEOs of three major European chip manufacturers—Infineon, STMicroelectronics, and NXP Semiconductors—voiced their concerns. They highlighted the impact of uncertainty and rising nationalism-driven industrial policies, with governments in the U.S. and Europe demanding regional self-sufficiency in semiconductor production. This trend is leading to market fragmentation and poses significant development challenges for companies.
Infineon's CEO, Jochen Hanebeck, indicated that the trend of chip industry fragmentation is accelerating and warned that the situation could worsen with the imposition of tariffs. STMicroelectronics CEO Jean-Marc Chery emphasized the inefficiency of producing chips separately for China and the West, resulting in substantial material and engineering costs. NXP's CEO, Kurt Sievers, argued that no single country could dominate the chip industry, nor could they independently develop it in isolation without incurring excessive costs. He expressed confidence that governments would eventually realize the impracticality of such approaches.
