Foreign companies are increasing capacity in Vietnam to test and package chips while domestic companies consider investments, as the shift of industrial activity out of China accelerates due to trade tensions with the West, they said. declared leaders.

The semiconductor manufacturing sector, which requires less capital than the more strategic manufacturing of front-end chips at foundries, is currently dominated by China and Taiwan, but Vietnam is among the fastest growing countries in the $95 billion segment.

Hana Micron vice president for Vietnam Cho Hyung Rae told Reuters the company was expanding in the Southeast Asian country to meet demands from industrial customers who wanted to move some of their capacity from production outside China.

The South Korean company is investing about 1.3 trillion won ($930.49 million) through 2026 to boost packaging operations for existing memory chips, a South Korea-based company official said.

US-based Amkor Technology announced a $1.6 billion plan last year to build a 200,000 square meter (2.2 million square foot) factory that it said would become its largest and the most advanced, “providing next-generation semiconductor packaging capabilities.”

A company executive with direct knowledge of Amkor’s operations in Vietnam said some of the equipment installed in the new factory had been transferred from factories in China.

Amkor did not respond to requests for comment on the machine transfer.

Intel, which had a large booth last week at Vietnam’s first international semiconductor show near Hanoi, has the largest back-end chip factory in its global network in the country.

NATIONAL PLAYERS

Vietnam’s growth in the end-end segment of the chip industry has been encouraged by the Biden administration amid growing trade tensions between Washington and Beijing, which could further intensify with Donald Trump’s second presidency.

Thanks largely to investment from foreign companies, Vietnam is expected to hold an 8-9% share of global chip assembly, testing and packaging (ATP) capacity by 2032, up from just 1% in 2022, according to a report published in May by the US Semiconductor Industry Association and the Boston Consulting Group.

Local businesses are also expected to contribute to the sector’s expected growth.

Vietnamese technology company FPT is building a testing factory near Hanoi, according to three industry sources, who declined to be named because the information was not public.

A company source said the 1,000 square meter factory is expected to start operations early next year with 10 testing machines, which will be tripled by 2026, with an investment of up to 30 million of dollars. However, it remains on the lookout for strategic partners.

FPT did not respond to a request for comment.

Vietnamese investment firm Sovico Group is also seeking a foreign partner to co-invest in an ATP facility in Danang, a coastal city in central Vietnam, said Le Dang Dung, senior adviser to Sovico.

Vietnam also aims to become a player in front-end chip manufacturing.

Viettel, a state-owned defense and telecommunications company, plans to build Vietnam’s first foundry, two company sources said, to meet the government’s ambitious goal of having at least one manufacturing plant online. here 2030.

The company did not respond to a request for comment.