Vietnam has the potential to attract investment in many cutting-edge industries, but how can the opportunity be turned into reality? Implementing new investment support policies, including cash, could be the answer.
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| Samsung has always considered Vietnam as its global production "base". Photo: Duc Thanh |
Opportunity to get ahead in attracting technology "eagles"
A few days ago, Foxconn Group received the nod from the Quang Ninh provincial government to be able to deploy two projects with a scale of 551 million USD in this locality. Both projects, one to produce smart entertainment products, the other to produce smart systems, are projects in the processing and manufacturing industry that Quang Ninh is looking to attract investment.
With these two projects, Foxconn has increased its total investment capital in Quang Ninh to nearly 1 billion USD and its total investment capital in Vietnam to more than 3 billion USD. This investor is having large-scale projects in the field of electronics and components in Bac Giang and Bac Ninh, including the production of equipment and components for Apple. Last month, Foxconn also invested in a 383 million USD project in the Nam Son - Hap Linh Industrial Park (Bac Ninh).
Meanwhile, Amkor Group has just received an adjusted investment certificate to increase its investment capital by another 1.07 billion USD for its semiconductor project in Bac Ninh. With this decision, the total investment capital of the Amkor project has reached 1.6 billion USD, 11 years earlier than expected. Initially, Amkor determined that it would not invest enough 1.6 billion USD in Vietnam until 2035.
Not only the two investors above, recent information shows that many large technology corporations, such as Samsung, LG, as well as "big guys" in the processing and manufacturing industries, such as Hyosung, CJ, Posco... are also planning to invest billions of USD more in Vietnam in the near future.
At a meeting with Prime Minister Pham Minh Chinh in South Korea a few days ago, Mr. Jeong Cheol-dong, CEO of LG Display, said that LG has disbursed more than 5 billion USD in investment in Vietnam and will invest an additional 3 billion USD in the next 5 years. In this plan, the LG Innotel factory is expected to double its capacity, thereby forming a closed production complex of LG in Vietnam.
“Vietnam is LG's global key production location,” said Jeong Cheol-dong.
Meanwhile, Samsung has long considered Vietnam as its global production “base”, with a total investment capital of over 22.4 billion USD and continuing to increase capital in recent years (an average of about 1 billion USD/year). Even with the R&D Center put into operation from the end of 2022, Samsung has identified Vietnam as the group’s global R&D “base” - a position that Vietnam had never expected before.
But certainly, the future will not stop there. Because Vietnam is becoming the focus of attention of global corporations in the fields of semiconductors and artificial intelligence (AI). Intel, Amkor, HanaMicron, Marvell, Synopsys… have been and are continuing to invest in Vietnam. Meanwhile, NVIDIA Corporation is also gradually realizing its plan to turn Vietnam into its “second homeland”. A few days ago, Minister of Planning and Investment Nguyen Chi Dung continued to have an online conversation with NVIDIA to discuss promoting cooperation plans.
Destination of pioneering industries
The interest of technology “eagles” in Vietnam is real. In a statement released a few days ago, the Ministry of Planning and Investment said that not only will many large projects in the fields of semiconductors, energy (such as battery production, photovoltaic cells, silicon bars), component production, electronic products, and value-added products receive new investment and capital expansion in the first 6 months of 2024, but Vietnam also has “prospects to attract investment in many pioneering industries”. AI, semiconductors, hydrogen, renewable energy… are probably the fields mentioned by the Ministry of Planning and Investment.
The Ministry of Planning and Investment is finalizing the Draft Decree on the establishment, management and use of the Investment Support Fund. Accordingly, high-tech enterprises; enterprises with high-tech product manufacturing investment projects; enterprises with high-tech application projects... can receive support from the Government. 
According to Statista Market Insights, Vietnam's semiconductor revenue will achieve a Compound Annual Growth Rate (CAGR) of 11.6% in the 2023-2027 period, reaching 31.28 billion USD in 2027. Of which, integrated circuits - the most important segment in the semiconductor industry - are expected to be worth 16.44 billion USD this year.
According to Google’s forecast, Vietnam’s digital economy will grow 11 times by 2030, reaching $220 billion, equivalent to nearly half of Vietnam’s current GDP. “AI will be one of the key factors for Vietnam to realize the above forecast,” said Marc Woo, Managing Director, Vietnam, Google Asia Pacific.
The outlook is clearly positive. But in the current context, when competition to attract investment is increasingly fierce, Vietnam must act quickly, otherwise it will miss its “opportunity of a thousand years”.
In a recent report to the Government, Minister of Planning and Investment Nguyen Chi Dung, when mentioning the difficulties and challenges of the economy, also said that new industries and fields such as digital economy, green economy, AI, chips, semiconductors, etc. have not had clear changes, and are at risk of not being able to catch up with the world and the region.
According to the Ministry of Planning and Investment, although foreign investment in Vietnam has been growing in recent years, the number of large-scale projects with high technology content is still modest. Specifically, Vietnam has only attracted 108 projects with investment capital of over 500 million USD, an average of 15 projects/year, of which only 27 are in the high-tech sector.
“To continue to be successful in attracting investment, it is necessary to urgently prepare skilled human resources, especially in the field of semiconductor electronics; at the same time, overcome the local power shortage in some localities with many electronics industry projects. Along with that, review procedures to simplify and shorten processing time, especially procedures after granting investment registration certificates, such as construction permits, fire prevention and fighting permits…”, the leader of the Ministry of Planning and Investment expressed.
But that is just one of the problems. The pressure to compete to attract foreign investment in the high-tech sector is increasing, as more and more countries, including the US, Europe, South Korea, Japan, Malaysia, Indonesia, Thailand, etc., issue “huge” investment support policy packages.
For example, South Korea has announced a 26 trillion won (about $19 billion) support package to support the chip industry; Malaysia will launch the New Industrial Master Plan 2030 (NIMP) by the end of 2023, with a scale of about $20 billion, to transform Malaysia's industrial sector, especially the electrical and electronics, chemicals, electric vehicles, aerospace, pharmaceuticals, medical devices and advanced materials sectors.
Meanwhile, China has even established a $27 billion semiconductor investment fund to promote the self-reliance of China's semiconductor industry... The US and Europe are also willing to spend tens of billions of dollars to support investors in the semiconductor sector...
The pressure is growing, requiring Vietnam to soon prepare human resources, infrastructure, etc., and include internationally competitive investment support policies, to both retain existing investors and attract more "eagles".
In recent meetings, global corporations have also expressed interest in the establishment of Vietnam's Investment Support Fund. The Ministry of Planning and Investment is finalizing the Draft Decree on the establishment, management and use of the Investment Support Fund. Accordingly, high-tech enterprises; enterprises with investment projects in the production of high-tech products; enterprises with high-tech application projects; enterprises with investment projects in R&D centers, depending on meeting specific criteria, can receive support from the Government, including financial support.
If approved, this will be a "boost" for Vietnam to attract more technology "giants" and truly become a "destination for pioneering industries".
Source: https://baodautu.vn/viet-nam---diem-den-cua-cac-nganh-cong-nghiep-tien-phong-d219961.html
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