Vietnam Takes Historic Step into Semiconductor Manufacturing with First Indigenous Chip Fabrication Plant

A New Chapter in Vietnam’s Technological Ambitions

Vietnam has officially broken ground on its first semiconductor chip fabrication plant, marking a significant milestone in the nation’s quest to build domestic high-tech manufacturing capabilities. The ceremony took place at Hoa Lac Hi-Tech Park in Hanoi on January 16, with high-level government officials including Party General Secretary To Lam and Prime Minister Pham Minh Chinh in attendance. This project represents Vietnam’s first foray into chip fabrication, widely considered the most complex and capital-intensive stage of semiconductor production.

The facility, developed by the military-run Viettel Group under a mandate from the Ministry of National Defense, spans 27 hectares and aims to begin pilot production of 32-nanometer chips by the end of 2027. Prime Minister Pham Minh Chinh emphasized the strategic importance of this development at the groundbreaking ceremony.

“This helps complete a critical link in the global semiconductor value chain, marking a shift from participation to ownership and from assembly to innovation, and strengthening Vietnam’s capabilities and position in the digital era.”

The plant is designed to serve as national infrastructure for semiconductor research, design, testing, and manufacturing. Once fully operational, it will supply chips to key industries including aerospace, telecommunications, Internet of Things (IoT), automotive manufacturing, medical devices, and automation systems.

Understanding the Semiconductor Value Chain

To appreciate the significance of this development, it helps to understand the semiconductor production process. A complete semiconductor chip typically moves through six main stages: product definition, system design, detailed design, chip fabrication, packaging and testing, and integration and verification. Vietnam has gradually built capabilities across five of these stages in recent years, but chip fabrication has remained beyond domestic reach until now.

Chip fabrication, or “front-end manufacturing,” is the process of transforming silicon wafers into integrated circuits through dozens of precision operations. This stage involves photolithography, etching, doping, and other sophisticated processes that require multi-billion dollar facilities and highly specialized expertise. The complexity of this stage explains why Vietnam has focused on other aspects of the semiconductor supply chain, primarily chip design and back-end manufacturing of assembly, packaging, and testing.

The new Viettel plant will close this gap, enabling Vietnam to complete the entire semiconductor production cycle within its borders. This capability is crucial for building a self-reliant technology ecosystem and reducing dependence on foreign suppliers for critical components.

Industry experts note that building and operating a semiconductor fabrication plant can cost anywhere from $10 billion to $50 billion depending on scale and technology node. There are long payback periods and intense global competition dominated by players such as Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics.

Nguyen Thanh Yen, general director of the Hanoi branch of South Korean chip design firm CoAsia Semi and founder of the Vietnam Microchip Community, provided context on the financial challenges.

“A fab built today will almost certainly lose money—it’s burning cash. But a fab also plays the role of infrastructure, like building roads. If Vietnam wants to go down the semiconductor path, it has to be done sooner or later.”

Timeline and Technical Specifications

Viettel Group has outlined a clear timeline for the project’s development. Lieutenant General Tao Duc Thang, Chairman and CEO of Viettel Group, detailed the roadmap at the groundbreaking ceremony. The company aims to complete construction, receive technology transfer, and begin pilot production by the end of 2027. The initial focus will be on 32-nanometer chips, which represent mature technology compared to the cutting-edge 3-nanometer and 5-nanometer processes used for the most advanced processors today, but remain suitable for many industrial and commercial applications.

From 2028 to 2030, the project will focus on refining and optimizing manufacturing processes, improving production line efficiency according to industry standards, and laying the groundwork for research into more advanced chipmaking technologies. The long-term vision includes expanding the facility’s scale to provide a foundation for Vietnam to gradually access more advanced semiconductor technologies.

The 32-nanometer node is a strategic starting point. While not at the absolute forefront of semiconductor technology, it is widely used in automotive electronics, IoT devices, industrial control systems, and various embedded applications. This allows Vietnam to serve domestic and regional markets while building expertise that can eventually be applied to more advanced process nodes.

Viettel has been preparing for this undertaking through in-depth human resources training, international cooperation, and technology transfer. The group has also been accumulating experience from research, design, and the application of chips in its own technology systems and products, including self-designed chips for 5G base stations.

National Strategy and Government Support

The Viettel project aligns with Vietnam’s national semiconductor industry strategy, which sets ambitious targets for the sector’s development. By 2030, Vietnam aims to have at least 100 semiconductor design companies and one semiconductor chip manufacturing plant, along with 10 assembly and testing facilities. The country plans to train over 50,000 engineers and graduates by 2030, preparing a high-quality workforce for the period from 2030 to 2050.

The economic targets are equally ambitious. By 2030, the semiconductor industry aims to achieve annual revenues exceeding $25 billion, with added value in Vietnam ranging from 10 to 15 percent. The broader electronics industry is expected to surpass $225 billion in annual revenue by that time.

Prime Minister Pham Minh Chinh outlined the government’s commitment to supporting this strategic industry. He emphasized that semiconductor chips, despite their small size, play a decisive role in national power across economic, industrial, and defense-security dimensions. The global semiconductor industry is now valued at approximately $2.3 trillion and has evolved beyond economics to become a matter of geopolitics, national security, and technological power.

“Those that lack domestic semiconductor production capacity face significant strategic vulnerabilities, limiting their economic development and national security,” the Prime Minister noted.

The government has offered various incentives to support the sector, including a national programme to train semiconductor engineers and the Investment Support Fund, which provides cash grants covering operational and initial investment costs for high-tech projects, particularly in semiconductors and artificial intelligence.

Workforce Development and Training Initiatives

A critical component of Vietnam’s semiconductor strategy is human resource development. The new fabrication plant is expected to serve as a hands-on training center, linking education with real-world production environments. Vietnam seeks to train 50,000 chip design engineers by 2030 under its semiconductor workforce development program, with projections that the total chip workforce will exceed 100,000 by 2040.

This workforce development is essential because semiconductor manufacturing requires specialized skills that are in short supply globally. The complexity of modern fabrication processes means that engineers and technicians need extensive training and hands-on experience to operate effectively. By establishing an operational fabrication plant, Vietnam creates an environment where its workforce can develop these critical skills domestically rather than relying entirely on training abroad.

The training initiative addresses a common bottleneck in semiconductor industry development. Many countries have discovered that having fabrication facilities is insufficient without a qualified workforce to operate them. Vietnam’s integrated approach, combining facility construction with workforce development, aims to avoid this common pitfall.

The plant’s location at Hoa Lac Hi-Tech Park positions it near educational institutions and research facilities, facilitating collaboration between academia and industry. This proximity is expected to enhance the effectiveness of training programs and accelerate the development of a skilled semiconductor workforce.

Parallel Developments in Vietnam’s Semiconductor Ecosystem

While Viettel’s fabrication plant represents the most ambitious semiconductor project in Vietnam, it is not the only development in the country’s growing chip ecosystem. CT Semiconductor, a subsidiary of CT Group, has begun construction on what is set to become Vietnam’s first semiconductor chip factory fully owned by a domestic company, focusing on outsourced semiconductor assembly and test (OSAT) operations.

Located in Binh Duong province, the CT Semiconductor facility covers 30,000 square meters and is expected to begin operations in the fourth quarter of 2025. The factory targets a production capacity of 100 million chips per year by 2027, with an investment of approximately $100 million for the second phase alone. The company is working with international consultants who have experience with major semiconductor projects, including facilities for Taiwan’s TSMC.

Azmi Bin Hussin Wan, Chief Operating Officer of CT Semiconductor, articulated the ambitious vision for this project.

“Today, we announce a bold vision: By September 2025, the first chip fully assembled, packaged, and tested in Vietnam by a 100% Vietnamese-owned OSAT company will be born from this production line. This achievement will stand as a symbol of the intelligence and boundless potential of the Vietnamese people.”

CT Semiconductor is also researching emerging technologies including GaN (gallium nitride), photonics, and advanced packaging, with applications in AI, 6G communications, and drone systems. The factory is part of CT Group’s broader push into high-tech sectors, which also includes unmanned aerial vehicles and smart transportation.

Foreign companies have also been investing in Vietnam’s semiconductor capabilities. Hana Micron Vina, a South Korean manufacturer, operates a semiconductor facility in Bac Giang province that specializes in integrated circuit boards for mobile phones and advanced electronic products. The company has invested nearly $600 million and aims to elevate total investment to over $1 billion by 2025, with anticipated revenues of approximately $800 million.

International Context and Comparisons

Vietnam’s semiconductor ambitions come amid a global reshuffling of semiconductor supply chains driven by geopolitical tensions and the recognition that chip manufacturing is strategically important. Countries around the world are racing to build domestic capabilities, with the United States, European Union, Japan, and others offering substantial subsidies to attract semiconductor manufacturing facilities.

Vietnam can look to other Asian nations for models of successful semiconductor industry development. Malaysia, for example, currently accounts for 13% of the global OSAT market—a remarkable figure for a country of its size. Many top executives at leading global tech corporations, including the CEOs of Intel and Qualcomm, are Malaysian, demonstrating how a country can develop both manufacturing capabilities and executive talent in the semiconductor sector.

CT Group Chairman Tran Kim Chung has urged the Vietnamese government to consider long-term support policies for the semiconductor industry, drawing comparisons with frameworks used in South Korea, mainland China, and Taiwan.

“We hope the Government will consider the lessons learned from countries such as South Korea, China, and Taiwan (China), where the semiconductor industry received substantial financial support for a decade until it became firmly established. Our country should draw from these examples and adopt similar policies.”

These countries provided substantial funding for semiconductor enterprises for more than a decade until they became globally competitive. This long-term commitment is often cited as a key factor in their success, as semiconductor manufacturing requires patience and sustained investment before becoming profitable.

The international interest in Vietnam’s semiconductor ambitions is evident. Eduard Stiphout, senior vice-president of strategic sourcing and procurement at Dutch chip equipment giant ASML, recently visited Hanoi to explore opportunities to expand the company’s supply chain in Vietnam. ASML, the world’s largest maker of photolithography systems for computer chip manufacturing, is reportedly seeking to collaborate on establishing training and research and development centers in Vietnam.

Challenges and Considerations Ahead

While the groundbreaking of Vietnam’s first semiconductor fabrication plant represents a significant achievement, substantial challenges remain. The semiconductor industry is characterized by rapid technological change, intense global competition, and enormous capital requirements. Maintaining competitiveness requires continuous investment in research and development, regular upgrades to manufacturing equipment, and the ability to attract and retain specialized talent.

The 32-nanometer technology that Viettel plans to produce is several generations behind the state-of-the-art. Leading semiconductor manufacturers are now producing chips at 3-nanometer and 5-nanometer nodes, with even smaller processes under development. While 32-nanometer chips have many practical applications, they do not command the premium prices of cutting-edge chips. This will affect the economics of the facility and may limit its revenue potential in the short term.

Another challenge is the global nature of the semiconductor supply chain. Even with domestic fabrication capabilities, Vietnam will still need to import raw materials, manufacturing equipment, and potentially some specialized components. The country’s ability to secure reliable supplies of these inputs will be crucial for the facility’s operation.

Environmental concerns also accompany semiconductor manufacturing. Fabrication plants consume substantial amounts of water and electricity, and use various chemicals that require careful handling and disposal. Managing these environmental impacts while maintaining cost competitiveness will be an ongoing challenge.

Despite these challenges, the establishment of domestic semiconductor manufacturing capabilities represents a significant step forward for Vietnam’s technological development. The success of this initiative will depend on sustained government support, effective management of the facility, successful workforce development, and Vietnam’s ability to find competitive niches in the global semiconductor market.

Key Points

• Vietnam broke ground on its first semiconductor chip fabrication plant on January 16, 2026, at Hoa Lac Hi-Tech Park in Hanoi.
• The facility is developed by Viettel Group under a mandate from the Ministry of National Defense and spans 27 hectares.
• Pilot production of 32-nanometer chips is scheduled to begin by the end of 2027, with process optimization planned for 2028-2030.
• The plant will supply chips to aerospace, telecommunications, IoT, automotive, medical device, and automation industries.
• Vietnam aims to train 50,000 chip design engineers by 2030 and build a semiconductor workforce of 100,000 by 2040.
• CT Semiconductor is building a separate OSAT facility in Binh Duong province, expected to produce 100 million chips annually by 2027.
• The semiconductor industry targets annual revenues exceeding $25 billion by 2030, with the electronics industry aiming for $225 billion.
• Vietnam’s chip exports reached $32.4 billion in 2023, ranking eighth globally.