Vietnam Breaks Ground on Its First Wafer Fab — How Far Can the Semiconductor Dream Go?
On January 16, Vietnam's General Secretary To Lam and Prime Minister Pham Minh Chinh attended a groundbreaking ceremony together. The site: Hoa Lac Hi-Tech Park on the outskirts of Ha Noi. The centerpiece: a 27-hectare chip fabrication plant — Vietnam's first ever.
The announcement sparked an obvious question: is Vietnam actually making its own chips now?
Viettel, the military-backed giant, takes the lead
The fab is being built by Viettel Group, Vietnam's largest telecom operator and a state enterprise under the Ministry of National Defence. Its business spans communications, cybersecurity, drones, and even satellites.
According to Viettel chairman Dao Duc Thang, construction and technology transfer are scheduled to finish by end of 2027, when trial production begins. From 2028 to 2030, the focus shifts to process optimization and yield improvement.
The fab will use 32-nanometer process technology — by global standards, that is over a decade old. TSMC mass-produced 28nm chips back in 2011 and has since pushed leading-edge nodes below 3nm.
But for Vietnam, 32nm is still a breakthrough — building something from nothing.
Why build a wafer fab?
The semiconductor supply chain has roughly six segments: design, fabrication, packaging, testing, equipment, and materials. Vietnam currently relies on foreign-invested back-end plants, with some early-stage IC design activity, but wafer fabrication, equipment, and materials remain largely absent.
The reason is straightforward: building fabs costs an enormous amount of money.
An advanced-node fab can require tens of billions of USD. Even mature-node facilities start in the billions. The technology barriers are high, payback periods are long, and few countries can afford to play.
The Vietnamese government is putting up VND 12.8 trillion (around USD 500 million) in subsidies, along with tax incentives and priority land allocation. Even so, industry insiders say the plant will almost certainly lose money in its early years.
Nguyen Thanh Yen, CEO of CoAsia Semi Vietnam and a veteran of the semiconductor industry, put it plainly: "A wafer fab is infrastructure. If Vietnam wants to build a semiconductor industry, it has to be built sooner or later."
Not just Viettel — foreign players have long been here
Vietnam's semiconductor footprint did not start from zero.
Intel announced a USD 1 billion investment back in 2006, building an assembly and test facility at Saigon Hi-Tech Park in TP. Ho Chi Minh. It opened in 2010 and later became Intel's largest such facility worldwide, handling more than half of the company's global packaging and testing volume. In 2021, Intel added another USD 475 million to expand capacity, bringing its total investment to USD 1.5 billion.
Samsung has not stood aside either. In 2022, the South Korean giant announced a USD 3.3 billion expansion of its Vietnam semiconductor operations, pushing its total investment past USD 23 billion and cementing its position as Vietnam's largest foreign investor.
In October 2023, US packaging and test specialist Amkor opened a USD 1.6 billion plant in Bac Ninh Province — its most advanced assembly and test facility in the world — further strengthening Vietnam's back-end manufacturing base.
In short, foreign capital has already built out Vietnam's back-end semiconductor capacity. Viettel's groundbreaking is the first step into front-end manufacturing.
Talent is the biggest bottleneck
Hardware can be built with money. A skilled workforce cannot be assembled overnight.
Vietnam currently has around 6,000 semiconductor engineers, according to official figures. The government has set targets of 50,000 by 2030 and 100,000 by 2040 — but the Ministry of Information and Communications estimates the annual shortfall in IT and digital engineers alone already reaches 150,000, with current supply meeting only 40 to 50 percent of demand.
That is why Viettel stresses that the fab will also serve as a training center, integrating education with production.
How far can it go?
Official plans call for Vietnam to have 100 chip design companies, at least one wafer fab, and 10 packaging and test facilities by 2030, generating USD 25 billion in annual industry revenue. By 2050, the target expands to three fabs and USD 100 billion a year.
Anyone familiar with Vietnam knows the government tends to set timelines that outpace actual delivery. Many large infrastructure and industrial policy initiatives have slipped by years, and whether this semiconductor strategy will stay on schedule is far from certain.
The immediate challenges are real: process technology that trails the leading edge by over a decade, a large talent gap, near-certain early losses, and competition from established players in Taiwan, South Korea, and Malaysia.
This fab is less about competing with other countries and more about laying the groundwork Vietnam needs before a domestic semiconductor industry can exist at all — giving defence, communications, automotive, and other sectors a chance to source chips locally.
Whether that ambition holds will depend on execution over the next few years.
