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Vietnam is negotiating with chip companies to increase investment in the country and develop incentive plans for chip companies to build Vietnam's first chip manufacturing plant.

Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council, said there had been talks with six US chip companies in recent weeks. He declined to name the companies because the talks are still preliminary.

Another chip executive, who was not allowed to speak to the media, said talks with potential investors involved US contract manufacturer GlobalFoundries and Taiwan's PSMC. The goal is to build Vietnam's first fab, most likely to produce mature process chips for automotive or telecommunications applications, the executive added.

The Vietnamese government hopes to build its first fab by the end of the decade and says chip companies will benefit from "the highest incentives offered by Vietnam." The meetings at this stage are mainly aimed at testing investor interest and discussing potential incentives and subsidies, including power supply, infrastructure and a trained workforce.

But Robert Li, vice-president of Synovus, a chip design company with operations in Vietnam, said Hanoi should "think twice" before subsidising fab construction. He told the Vietnam Semiconductor Summit in the Vietnamese capital Hanoi that it could cost as much as $50 billion to build a foundry, and that Vietnam's subsidies compete with those of China, the United States, South Korea and the European Union. John Neuffer, president of the Semiconductor Industry Association, advised the Vietnamese government at the conference to focus on areas where Vietnam is already strong, such as assembly, packaging and testing.

Us chip giant Intel set up the world's largest chip assembly, packaging and testing plant with a total investment of more than $1 billion in Vietnam more than 10 years ago. Amkor Technology, a veteran cap testing giant headquartered in Arizona, has invested a total of $1.6 billion in a plant built in Bac Ninh province, Vietnam. South Korean chip packaging and memory product maker Hana Micron, which plans to invest $1 billion in chip production in Vietnam by 2025, is moving equipment to its second plant in Vietnam's Bac Giang province to prepare for chip production.

In September, U.S. President Joe Biden visited Hanoi, where the White House said the former U.S. enemy could be a "key player" in the global semiconductor supply chain. In October, Nguyen Phu Hung, director of the Department of Science and Technology in the Economic and technological sectors of Vietnam's Ministry of Science and Technology, said that recent cooperation between Vietnam and the United States and other countries in the field of semiconductor chips has brought great opportunities for Vietnam. Vietnam is well placed to participate in the global semiconductor value chain.

But a big challenge for Vietnam's semiconductor industry is the shortage of information technology engineers. Training about 30,000 to 50,000 personnel and experts for the semiconductor industry is part of the Vietnamese government's human resources development plan for the semiconductor industry by 2030.

In terms of semiconductor talent, statistics from Vietnam's Ministry of Education and Training show that at present, about 11 universities in Vietnam have training courses closely related to the semiconductor and microchip industry, and 35 universities have training or similar industry conversion programs related to semiconductors and microchips. Nguyen Jinshan, Minister of Education and Training of Vietnam, said that with the strength of current public universities and private universities, combined with the advantages of domestic and foreign enterprises and the attention of the government and local, chip semiconductor training is ushering in unprecedented opportunities. He said that if Vietnam can develop the semiconductor industry, it will certainly improve the national status.

According to the Vietnamese News Agency reported on November 1, the Vietnamese Ministry of Education and Training will carry out preliminary preparatory work, including the development of chip semiconductor plans, and set up a special coordination body. At the same time, the Ministry of Education and Training will develop a chip semiconductor training plan, develop a special mechanism to attract professionals, strengthen international cooperation, and strive to build Vietnam's own semiconductor industry in the future and provide human resources to the world.

Nguyen Phu Hung said that in the future, the Vietnamese Ministry of Science and Technology will vigorously implement the national science and technology plan related to semiconductor chips, introduce preferential mechanism policies, encourage domestic and foreign enterprises to increase investment in laboratories and research centers in the field of semiconductor chips, and support Vietnam's large domestic enterprises to participate in national projects in the field of semiconductor chips to create a semiconductor ecosystem.