Viet Nam is emerging as a hot investment destination for the semiconductor industry, attracting significant capital and interest from international corporations. The growth and potential of the semiconductor industry have a direct impact on industrial real estate, as the increasing demand for manufacturing facilities requires robust infrastructure and services
The semiconductor industry provides essential components for modern electronics, including microprocessors, memory, and data storage devices. With rising demand for electronic devices and technological advancement, the global semiconductor market is forecast to reach US$600 billion by 2025, growing by 14% from 2023, according to the Semiconductor Industry Association (SIA).
Viet Nam is already home to notable semiconductor players, including Samsung, Qualcomm, Infineon, and Amkor. This has supported the construction and expansion of manufacturing and assembly operations worth billions of dollars. By the end of 2024, Viet Nam's semiconductor industry is forecast to surpass US$6.16 billion, establishing the country as a key production hub for global semiconductor companies.
Viet Nam’s Semiconductor Sector – An Investment Hotspot
The semiconductor industry is increasingly attractive in the wake of global changes. The Covid-19 pandemic heightened the demand for semiconductors due to increased reliance on electronic devices during and after social distancing.
Viet Nam is well placed to capture this demand. Ha Noi received investment from Samsung for its largest R&D centre in Southeast Asia.
Several semiconductor companies from the Netherlands have also invested in Viet Nam. BE Semiconductor Industries N.V., Besi, invested VND 115 billion (US$4.9 million) in Ho Chi Minh City High-Tech Park to produce semiconductors. The project is set to start operations in Q1/2025.
According to Thomas Rooney, Senior Manager of Industrial Services at Savills Ha Noi, Viet Nam has great potential to be a semiconductor hub because it enjoys a strategic position in Southeast Asia with easy access to major regional markets. It also has favourable natural conditions and abundant rare earth resources, crucial materials in semiconductor production.
Viet Nam’s political landscape is also relatively stable, and the Vietnamese Government actively promotes the semiconductor industry with attractive tax incentives and investment support policies.
Thomas Rooney, Senior Manager Industrial Services, Nothern &Central, Savills Viet Nam
How Industrial Real Estate Benefits from Semiconductor Growth
Thomas Rooney analysed, “The investment demand for semiconductor manufacturing and assembly has driven an increase in the search for industrial land and facilities that meet the infrastructure and service requirements of the industry. Basic requirements include stable electricity supply, high-speed internet, and effective water systems, thereby necessitating improved facility quality and systems by investors in Viet Nam.”
The Northern Economic Region will continue to be a hotspot for industrial real estate. Northern provinces are home to companies operating in high-value industries, including computers, electronics, and electrical products. Therefore, developing semiconductor investment will boost industrial real estate growth in the north.
To attract capital into the semiconductor industry and industrial real estate, localities and enterprises must improve policy frameworks, infrastructure, and workforces to meet the stringent requirements of this specialised industry.
Currently, Viet Nam’s infrastructure is not fully developed, especially its power supply. During peak months, demand periodically outweighs supply, which could challenge a power-hungry industry like semiconductor manufacturing.
To meet the demand from semiconductors, Viet Nam should accelerate large-scale energy infrastructure projects. The Prime Minister approved the National Power Development Plan for 2021 to 2030, with a vision to 2050 (Power Plan VIII), prioritising investment projects and aiming for sustainable energy development. Viet Nam focuses on developing high-tech zones, particularly the National Innovation Centre (NIC), to set the groundwork for foreign corporations to invest and manufacture in Vietnam.
Although Viet Nam has a large working-age population of 52.4 million, Thomas notes that there is a lack of highly skilled engineers who are necessary for developing the semiconductor industry. The lack of quality human resources could limit large investments. Therefore, solving the workforce challenge would enhance Viet Nam’s position as an investment destination, attracting major technology corporations to invest in research, development, and production in Viet Nam.
The Ministry of Planning and Investment (MPI) emphasises developing Viet Nam’s labour capacity to increase the country’s competitiveness in semiconductor manufacturing. Semiconductor manufacturing comprises two main areas: research and development (R&D) and fabrication. Both processes have high labour demands. The Government has tasked the MPI to collaborate with the Ministry of Information and Communications, the Ministry of Education and Training, and relevant agencies to study and develop a human resources development proposal for the semiconductor industry, aiming to train and develop 50,000 workers for the sector by 2030.
Thomas concludes that the Government and enterprises must cooperate closely to leverage existing potential, improve the investment environment, enhance infrastructure quality, and train the workforce, thereby creating favourable conditions for the sustainable development of the semiconductor industry and industrial real estate in Viet Nam. With these efforts, Viet Nam can become a significant global semiconductor manufacturing hub, supporting the country’s economic development and enhancing its position in the global supply chain.