According to data from the General Statistics Office (Ministry of Planning & Investment), as of December 20, 2023, the total newly registered, adjusted and contributed capital to buy shares by foreign investors reached over 36.6 billion USD, an increase of 32.1% over the same period in 2022.
This is the year with the highest scale of realized FDI capital ever, and also the highest and most impressive increase since the Covid-19 pandemic appeared and broke out in 2020.
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| National Innovation Center at Hoa Lac Hi-Tech Park (NIC Hoa Lac). (Source: Dan Tri) |
Many advantages to attract FDI
Speaking with TG&VN reporters, General Director of the General Statistics Office Nguyen Thi Huong said that the above results were achieved due to the investment environment always being improved, becoming attractive with many outstanding advantages.
During the year, some projects had very high registered capital such as: Liquefied Natural Gas (LNG) Thermal Power Plant Project in Thai Binh from Japan; JINKO SOLAR Hai Ha Vietnam Photovoltaic Cell Technology Complex Project; Lite-on Quang Ninh Factory Project; LG Innotek Hai Phong Factory Project. These four major projects attracted nearly 5.2 billion USD during the year.
The General Director of the General Statistics Office assessed: “The continued FDI inflow into Vietnam affirms foreign investors' confidence in the stable macroeconomic policy; open and safe investment environment; the Government and the Prime Minister always accompany and support the business community to overcome difficulties, stabilize and develop production and business; many fiscal and monetary policies to support businesses have been effectively implemented. These factors have positively impacted foreign investors in deciding to invest in new projects, as well as expand existing projects in Vietnam”.
In particular, Ms. Nguyen Thi Huong said that over the past year, the economic diplomacy activities of the Party and Government have been strengthened, Vietnam has upgraded its relations with Japan and the United States to Comprehensive Strategic Partnership, expecting to bring a new wave of quality investment. This could be an optimistic trend, believing that FDI capital flows into the country will continue to grow well in 2024 and the following years.
A Busy Year for the Semiconductor Industry
2023 marks a vibrant year for Vietnam in attracting investment in the semiconductor industry. During the year, a series of world-leading names in this field continuously poured capital into Vietnam with projects worth up to billions of USD.
Specifically, Hana Micron Vina Co., Ltd. (Korea) inaugurated the Hana Micron Vina 2 factory in Van Trung Industrial Park (Bac Giang) in September 2023. With a total investment of nearly 600 million USD, this is the first semiconductor factory in the North. The company plans to increase its investment capital to more than 1 billion USD by 2025.
In October 2023, Amkor Group inaugurated the Amkor Technology Vietnam (ATV) Factory in Yen Phong II-C Industrial Park, Bac Ninh. The project has a total investment capital of 1.6 billion USD until 2030, of which phase I is 520 million USD. The semiconductor product testing and packaging service provider established in 1968 said it will continue to research and deploy investment in the construction of phases 2 and 3 of the factory, making Bac Ninh one of the world's new semiconductor chip manufacturing locations.
Or Vietnam's largest FDI investor - Samsung has committed to investing more than 2.6 billion USD in the semiconductor industry at the Samsung Electro - Mechanics Vietnam Factory in Thai Nguyen.
Not only investing in production in Vietnam, the world's leading technology corporations are planning to establish research and development (R&D) centers in Vietnam - a very important step in production to launch modern high-tech products. For example, Marvell Microchip Design Group (USA) announced that it will soon establish a large-scale design center in Vietnam. It is expected that after three years, the number of employees will increase by 50% compared to the present.
The above projects are the clearest evidence that Vietnam is on the right track to attract high-quality FDI capital. Localities such as Bac Giang, Bac Ninh, Thai Nguyen or Ho Chi Minh City are not only the leaders in assembling electronic components but can also become leading centers in the industry.
The time has come!
At a meeting with Minister of Planning and Investment Nguyen Chi Dung in December 2023, Chairman of the Semiconductor Industry Association (SIA) John Neuffer assessed that many SIA companies have made significant investments in Vietnam such as Intel, Marvell, Synopsys, Qualcomm, Ampere, Infineon... Some businesses have doubled their investment capital after many years of doing business in the country.
“These investments are a testament to Vietnam’s growing and pivotal role in the global semiconductor supply chain. Now is the time for the country to join the global supply chain and become an important link in the semiconductor supply chain. Vietnam is well-positioned to benefit from new waves of investment from chip companies that are working to build stronger, better supply chains around the world,” the SIA Chairman affirmed.
In December 2023, during a visit to Vietnam, Co-founder, Chairman and CEO of NVIDIA Jensen Huang - one of the leading chip corporations in the US, said that a new wave of technology is coming and could be the biggest wave ever.
“The new wave is a great opportunity for Vietnam. No country can fall behind in artificial intelligence (AI) and develop it. Therefore, the country needs to take advantage of AI to grasp and develop artificial intelligence. I believe Vietnam is ready and well prepared, this is your opportunity,” he emphasized.
To take advantage of this new wave, Mr. Jensen Huang said, Vietnam is ready to digitize when the majority of people use mobile phones. Besides, Vietnam has software engineers and they are ready to jump to the next step in AI. Vietnam shows a strong commitment to an AI, artificial intelligence and digital Vietnam.
Minister Nguyen Chi Dung informed that the country has actively prepared conditions to be ready to welcome and cooperate with businesses and investors in the semiconductor industry supply chain.
Vietnam has completed the one-stop mechanism, built a project to develop human resources for the semiconductor industry to reach 30,000 semiconductor engineers by 2030, and established the National Innovation Center at Hoa Lac High-Tech Park (NIC Hoa Lac) to be ready to receive semiconductor investment projects with the most preferential policies.
Prof. Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises (VAFIE), observed that the size of the global chip market by 2029 will reach 1,400 billion USD, up from about more than 600 billion USD in 2022. Therefore, the opportunity for Vietnam in this "giant cake" is huge.
The professor stated: “Semiconductor technology is a story of the whole world. Developed countries are all giving incentives to expand research and production for this industry. Vietnam does not have much money to invest, so it must rely on attracting FDI capital to develop.”
In fact, the S-shaped country is one of the choices of the world's leading chip investors. Professor Nguyen Mai said that the important thing now is to change the preferential approach to welcome this great opportunity.
Vietnam and many developing countries often choose tax incentives to attract capital. However, with the regulations on global minimum tax, attracting FDI in the coming time will have to focus on cost incentives and financial incentives in investment for businesses.
Early changes in preferential investment policies, as assessed by Professor Nguyen Mai, “will give Vietnam many opportunities to establish a semiconductor industry. From there, it will create a huge boost for the economy, increase added value, and create spillover effects not only in attracting foreign capital but also domestic capital participating in this value chain.”
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