Foreign investment in Vietnam is still on a positive trend, but more projects in high-tech and future technology fields are needed.
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| Processing and manufacturing is still the leading sector in attracting foreign investment. Photo: Duc Thanh |
Increase quantity, increase quality
Continuing the upward trend, foreign investment in Vietnam remains quite positive. In the first quarter of the year, according to data just released by the Foreign Investment Agency (Ministry of Planning and Investment), more than 6.17 billion USD of foreign investment capital was registered in Vietnam, an increase of 13.4% over the same period in 2023.
Of this, newly registered capital reached over 4.77 billion USD, up 57.9% over the same period last year. Meanwhile, additional capital reached 934.6 million USD, down 22.6%; and investment capital through capital contribution and share purchase reached over 466 million USD, down 61.7% over the same period.
Thus, in addition to the decrease in adjusted investment capital and capital contribution and share purchase, newly registered investment capital still maintained an increase compared to the same period and increased quite high. Similarly, disbursed capital reached 4.63 billion USD, up 7.1% over the same period in 2023.
Not only increasing in quantity, a piece of information emphasized by Mr. Do Nhat Hoang, Director of the Foreign Investment Agency, is that in the first quarter of the year, many large projects in the energy sector, including battery production, photovoltaic cells, silicon bars, projects to produce components, electronic products, and products with high added value, have received new investment and capital expansion.
A series of projects in these fields were granted investment registration certificates in the first 3 months of 2024. For example, the 120 million USD project of Boviet Hai Duong, specializing in the production of solar photovoltaic cells; the 454 million USD project of Trina Solar Cell in Thai Nguyen; or the 275 million USD project of Gokin Solar Hai Ha Vietnam in Quang Ninh...
That is positive information. However, in reality, what the public is expecting is that projects in the fields of high technology and future technology will land in Vietnam, after many foreign technology giants did not hesitate to express their interest in the Vietnamese market since last year. Perhaps, the time is not long enough for these "giants" to research and "take action" to invest capital.
Looking at statistics on foreign investment attraction in the first 3 months of the year, it can be seen that there are still no large-scale projects. The largest project to date is still a project worth more than 660 million USD in Hanoi, but this is a real estate project.
The Foreign Investment Agency's report even showed that investment projects in the processing and manufacturing sector, although still leading with 3.93 billion USD, decreased slightly by 1.3% compared to the same period last year.
From another perspective, the Foreign Investment Agency also said that the average scale of new investment projects in March 2024 only reached over 4.9 million USD/project, lower than the level of 7.4 million USD/project in February 2024 and the level of 10.6 million USD/project in January 2024. When the average capital scale of the project is still small, it is not possible to expect that investment projects in the technology field of the future will soon arrive.
Waiting for the technology project of the future
Positive news in recent days is that Hainan Drinda New Energy Technology Company (China) has just signed a memorandum of understanding on investing in the Solar Panel Manufacturing Plant Project in Hoang Mai II Industrial Park (Nghe An), with the investment capital scale in phase I possibly reaching 450 million USD.
To attract investment, it is necessary to enhance endogenous potential, modernize socio-economic infrastructure and continue reforming national administration. 
- Professor, Doctor of Science Nguyen Mai, Chairman of the Association of Foreign Investment Enterprises
Meanwhile, a few days ago, Lam Research Semiconductor Corporation (USA) came to Vietnam to seek investment opportunities. During a meeting with Prime Minister Pham Minh Chinh, Mr. Karthik Rammohan, Senior Vice President of Lam Research Corporation, said that Lam Research is planning to expand its operations and diversify its supply chain in the Asian region.
The plan to cooperate with Seojin Company (currently having factories located in Bac Ninh and Bac Giang) to develop a factory and a semiconductor supply chain, with an investment capital of 1-2 billion USD in phase I, was also shared by Mr. Karthik Rammohan. Even after phase I, Lam Research plans to directly invest and continue to expand its operations in Vietnam.
Similarly, the Hoa Dien Group - Minh Quang Company Joint Venture has also officially raised the issue of investing in a super green hydrogen production project, with an investment capital of about 2.4 billion USD in Quang Tri province.
These are all large-scale projects in areas where Vietnam is encouraging investment. Many large corporations are also interested in Vietnam as a destination. Even Professor Nguyen Mai, Chairman of the Association of Foreign Investment Enterprises, when announcing the recent 2023 FDI Annual Report, emphasized an “unprecedented opportunity” for Vietnam.
Appreciating Vietnam's goal of attracting investment in advanced technology projects, new technology, and future technology, such as semiconductors, artificial intelligence (AI), green hydrogen, etc., Professor Nguyen Mai said that the biggest problem is that Vietnam does not have appropriate institutions, policies, and mechanisms. Even the investment environment and administrative procedures still have many problems.
Therefore, in order to attract better quality and more effective FDI, Professor Nguyen Mai emphasized 4 solutions that need to be implemented. Accordingly, the top priority is still to perfect institutions and laws. Along with that, it is the implementation of institutions and policies, associated with decentralization, delegation of authority, individualization of responsibilities and promotion of the responsibility of leaders.
“To attract investment, we must enhance our internal potential, modernize our socio-economic infrastructure and continue to reform the national administration,” said Professor Nguyen Mai, adding that foreign investors are very interested in the issue of power supply and policy responses to Vietnam’s implementation of the global minimum tax. Therefore, it is necessary to have early countermeasures related to this issue.
At the Vietnam Smart Manufacturing and Global Supply Chain Forum 2024, which recently took place in Hanoi, Deputy Minister of Planning and Investment Tran Duy Dong also said that electronics, semiconductor chip, and smart manufacturing are the top priority areas for attracting investment in Vietnam.
According to Deputy Minister Tran Duy Dong, competition to attract investment in the electronics and semiconductor sectors is fierce. Countries that are quick to respond and have appropriate and drastic policies will dominate and take advantage of the new wave. Vietnam is also making efforts to take advantage of this opportunity.
“In addition to many mechanisms and policies to support high-tech industries, the National Assembly also passed a Resolution assigning the Government to develop a Decree on the Investment Support Fund, which is expected to provide appropriate support for the high-tech, electronics, and semiconductor sectors,” said Deputy Minister Tran Duy Dong.
When these policies are issued, along with the preparation of land, infrastructure, energy, human resources, etc., it is expected that future technology projects will flock to Vietnam.
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