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Manufacturing chip-semiconductor helps raise Vietnam’s position

Manufacturing chip-semiconductor helps raise Vietnam’s position Vietnam is asserting its position in the chip supply chain amid the global chip shortage and the fierce competition among major countries in terms of manufacturing chip-semiconductor and developing microchip industry, according to Sputnik Radio.

In a broadcast on November 16, the radio cited an article written by Le Phan and Nguyen Hai Thanh, two economists from the Central Institute for Economic Management (CIEM) posted on East Asia Forum on Vietnam’s progress in the global supply chain.

Samsung, the world's leading supplier of DRAM products, will spend 850 million USD in Vietnam to manufacture flip-chip ball grid arrays (FC-BGA).

The electronics giant also plans to inaugurate a Research and Development Center in Hanoi by the end of 2022 and early 2023, serving not only Vietnam but also Southeast Asia. According to the CIEM economists, the investment will make Vietnam one of only four countries — alongside the Republic of Korea, China and the United States — that produce semiconductors for the world’s largest memory chipmaker.

“Vietnam’s selection over more developed locations speaks volumes about the country’s rising importance in the semiconductor value chain,” they wrote.

Sputnik Radio noted that Vietnam is not a newcomer to the semiconductor industry. The country’s first semiconductor plant, Z181, was established in 1979 to produce and export semiconductor components to the former Eastern European countries.

Vietnam’s industrial and technology policies have always granted the highest incentives for high-tech projects, including corporate income tax reduction and sales tax and land rent exemption, the two economists noted.

One advantage of Vietnam over its regional neighbours is its pool of young engineering talent at a relatively lower cost.

Over 40% of Vietnamese college and university graduates are majoring in science and engineering, and Vietnam has been among the top 10 countries with the most engineering graduates, according to the economists.

Vietnam also boasts one of the most open economies in the world, with 15 free trade agreements, improved  business environment and a relatively stable government with clear socio-economic development plans, they wrote./.