Vietnam Breaks Ground on First Chip Fabrication Plant, Targeting Pilot Production by End of 2027

A 27 Hectare Site Marks Vietnam's Move Into Chip Fabrication

Vietnam broke ground on its first semiconductor chip fabrication plant on January 16, 2026, at Hoa Lac Hi-Tech Park in Hanoi. Developed by the military operated Viettel Group under a mandate from the Ministry of National Defense, the facility will cover 27 hectares and aims to begin pilot production of 32-nanometer chips by the end of 2027.

Party General Secretary To Lam and Prime Minister Pham Minh Chinh attended the ceremony. The project takes Vietnam into chip fabrication, the complex and costly process of turning silicon wafers into electronic circuits, after years of developing capabilities in design, assembly, packaging and testing.

Prime Minister Pham Minh Chinh described the project as a change in Vietnam's role in the semiconductor industry, moving toward control of a production stage that the country has previously lacked.

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.

Viettel's plant is intended to serve as national infrastructure for semiconductor research, design, testing and manufacturing. Once fully operational, it is expected to supply chips for aerospace, telecommunications, automotive manufacturing, medical devices and automation systems, as well as the Internet of Things, or IoT, which connects devices so they can exchange information.

Vietnam's immediate goal is to establish a working fabrication process and build the people and production skills needed to operate it. The construction ceremony begins that effort, with pilot manufacturing scheduled for the end of 2027 and further improvements planned through 2030.

What Vietnam Is Adding to the Chip Production Chain

A semiconductor chip typically passes through six main stages: product definition, system design, detailed design, fabrication, packaging and testing, and integration and verification. Product definition sets out what a chip must do. Design translates those requirements into circuits, while the final stages protect the chip, check its performance and confirm that it works in a larger device or system.

Vietnam has gradually developed capabilities across five of these stages. Fabrication has remained the missing part of domestic production. The Viettel project is intended to close that gap and make it possible to complete the semiconductor production cycle within the country.

Chip fabrication, also called front-end manufacturing, turns a silicon wafer into integrated circuits through dozens of precision operations. Photolithography transfers circuit patterns onto the wafer, etching removes selected material, and doping changes the electrical properties of particular areas. Together, these processes create the tiny structures that allow a chip to function.

Fabrication requires sophisticated equipment, specialized expertise and facilities costing billions of dollars. Those demands help explain why Vietnam has concentrated on chip design and back-end manufacturing, which includes assembly, packaging and testing.

A domestic fabrication plant would give Vietnamese designers and manufacturers access to another essential production stage at home. It is also intended to reduce dependence on foreign suppliers for critical components and support a technology industry with greater control over its own products.

Why Viettel Is Starting With 32-Nanometer Chips

Lieutenant General Tao Duc Thang, chairman and CEO of Viettel Group, outlined the project's timetable at the groundbreaking ceremony. Viettel aims to complete construction, receive technology transfer and begin pilot production by the end of 2027.

The initial process will produce 32-nanometer chips. A technology node is the name used for a generation of chip manufacturing technology. Viettel's planned node is mature compared with the 3-nanometer and 5-nanometer processes used for the most advanced processors, but it remains suitable for many industrial and commercial applications.

Automotive electronics, IoT devices, industrial control systems and embedded applications are among the uses identified for 32-nanometer chips. Embedded chips perform particular tasks inside a larger product. Starting with this technology gives Vietnam a route to serve domestic and regional demand while developing experience for more advanced manufacturing.

Viettel plans to refine and optimize its manufacturing processes from 2028 to 2030, improve production line efficiency against industry standards and prepare for research into more advanced chipmaking technologies. Its longer term vision includes expanding the facility's scale.

Viettel has prepared through intensive staff training, international cooperation and technology transfer. It has also gained experience researching, designing and using chips in its own systems and products, including chips it designed for 5G base stations.

The project's main dates are:

• January 16, 2026: Groundbreaking at Hoa Lac Hi-Tech Park in Hanoi.
• By the end of 2027: Target for completing construction, receiving technology transfer and starting pilot production of 32-nanometer chips.
• 2028 to 2030: Planned improvements to manufacturing processes and production efficiency, alongside preparation for research into more advanced technology.

A Costly Investment With a Public Infrastructure Role

Semiconductor fabrication plants can cost between $10 billion and $50 billion to build and operate, depending on their scale and technology node. The industry has long payback periods and strong global competition, with Taiwan Semiconductor Manufacturing Company, or TSMC, and Samsung Electronics among its dominant businesses.

Nguyen Thanh Yen, general director of the Hanoi branch of South Korean chip design firm CoAsia Semi and founder of the Vietnam Microchip Community, described the financial pressure and the wider purpose of a domestic fab, the industry's short name for a fabrication plant.

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.

Yen's comparison with roads captures the project's intended national role. Alongside producing chips, the facility is expected to support research, design, testing and practical training. Those activities can help other parts of Vietnam's semiconductor industry develop.

Viettel's proposed technology also brings commercial constraints. The 32-nanometer process is several generations behind the most advanced manufacturing processes, and its chips do not command the premium prices associated with the latest processors. That may limit revenue in the early years, even where the technology meets customers' needs.

The factory will need continued spending on research and development, equipment upgrades and specialized workers. Finding competitive markets for its products will matter alongside the national goal of establishing fabrication capability.

How the Plant Fits Vietnam's 2030 Targets

Vietnam's national semiconductor strategy calls for at least 100 semiconductor design companies, one chip manufacturing plant and 10 assembly and testing facilities by 2030. The Viettel project directly addresses the manufacturing plant target.

The strategy also aims to train more than 50,000 engineers and graduates by 2030, preparing a skilled workforce for the period from 2030 to 2050. Its economic targets include annual semiconductor industry revenue exceeding $25 billion by 2030, with added value generated in Vietnam accounting for 10 to 15 percent.

Added value is the part of a product's value created through work performed locally, rather than through imported inputs. Vietnam's revenue and added value targets therefore address both the scale of the industry and the share of its activity that benefits domestic production.

The broader electronics industry is expected to exceed $225 billion in annual revenue by 2030. Vietnam's chip exports reached $32.4 billion in 2023, placing the country eighth globally. Export receipts and industry revenue measure different activities, while the added value target focuses on the contribution made within Vietnam.

Prime Minister Pham Minh Chinh said that chips, despite their small size, play a decisive role in economic and industrial strength, as well as defense and security. He described the global semiconductor industry as worth approximately $2.3 trillion and framed it as 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,

Government support includes a national programme to train semiconductor engineers and the Investment Support Fund. The fund provides cash grants toward operating costs and initial investment costs for technology projects, particularly those involving semiconductors and artificial intelligence.

Training Engineers Alongside Building the Factory

Vietnam's semiconductor workforce development programme seeks to train 50,000 chip design engineers by 2030. The total chip workforce is projected to exceed 100,000 by 2040. These ambitions sit alongside the national strategy's broader goal of training more than 50,000 engineers and graduates by 2030.

Viettel's facility is expected to become a practical training center, connecting education with an operating production environment. Semiconductor engineers and technicians need extensive instruction and experience to manage the complex processes used in fabrication.

Specialized skills are in short supply globally. A factory needs people who can operate its equipment, maintain stable processes and keep production running effectively. Vietnam's approach combines construction with workforce development so that the plant and the skills required to operate it can develop together.

Hoa Lac Hi-Tech Park places the project near educational institutions and research facilities. That location is expected to support cooperation between universities and industry, helping students and researchers gain experience closer to actual production.

Domestic fabrication would also give Vietnamese workers a place to develop these skills within the country, reducing reliance on training abroad. Viettel's existing research and chip design work provides experience that it can draw on as it prepares for manufacturing.

CT Semiconductor Is Building a Different Part of the Industry

CT Semiconductor, a subsidiary of CT Group, has begun construction of a separate semiconductor facility in Binh Duong province. Its project focuses on outsourced semiconductor assembly and test, or OSAT, rather than the wafer fabrication planned by Viettel.

The CT facility covers 30,000 square meters and is intended to become Vietnam's first semiconductor chip factory fully owned by a domestic company. Its work centers on assembling, packaging and testing chips. Viettel's project adds the earlier stage at which circuits are manufactured on silicon wafers.

CT Semiconductor's timetable anticipated operations in the fourth quarter of 2025 and annual capacity of 100 million chips by 2027. Investment for its second phase alone is approximately $100 million. The company is working with international consultants whose experience includes major semiconductor projects, including facilities for TSMC.

Azmi Bin Hussin Wan, chief operating officer of CT Semiconductor, set out an earlier milestone for the production line and described the company's ambition for domestic ownership.

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 gallium nitride, or GaN, photonics and advanced packaging. GaN is a semiconductor material, photonics uses light in technology, and advanced packaging concerns how chips are assembled and connected. The company has identified applications in artificial intelligence, 6G communications and drone systems.

The factory forms part of CT Group's wider expansion into technology, including unmanned aerial vehicles and smart transportation. Its packaging and testing plans illustrate how domestic companies are pursuing different stages of chip production at the same time.

Foreign Investment and Lessons From Asian Neighbors

Hana Micron Vina, a South Korean manufacturer, operates a semiconductor facility in Bac Giang province specializing in integrated circuit boards for mobile phones and advanced electronic products. The company has invested nearly $600 million and had targeted total investment above $1 billion by 2025, with anticipated revenue of approximately $800 million.

Completion of CT Semiconductor's announced 2025 production milestones and Hana Micron Vina's 2025 investment target was not confirmed as of January 18, 2026. Their announced schedules describe the scale and pace of the companies' ambitions.

Vietnam's expansion comes during a global reshuffling of semiconductor supply chains driven by geopolitical tensions and the strategic importance of chip manufacturing. The United States, European Union, Japan and others are offering substantial subsidies to attract fabrication facilities.

Malaysia accounts for 13 percent of the global OSAT market, providing a regional example of a large role in assembly and testing. Its contribution also extends to corporate leadership, with Malaysian executives at major technology companies, including the CEOs of Intel and Qualcomm.

CT Group chairman Tran Kim Chung called for sustained government support, pointing to the experience of 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.

Those economies supported semiconductor enterprises with substantial funding for more than a decade as they developed international competitiveness. Their experience matters to Vietnam because fabrication requires sustained investment and patience before a plant becomes profitable.

Eduard Stiphout, senior vice president of strategic sourcing and procurement at Dutch chip equipment company 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 seeking cooperation on training and research and development centers in the country.

What Operating the Plant Will Require

Viettel's next steps involve construction, technology transfer and the preparations needed for pilot production. Rapid technological change and intense competition make continued research, equipment investment and the recruitment and retention of specialized staff central to the project.

Vietnam will still need imported raw materials, manufacturing equipment and potentially some specialized components after establishing domestic fabrication. Reliable access to those inputs will be necessary for the facility to operate.

Fabrication plants also consume substantial amounts of water and electricity. They use chemicals that require careful handling and disposal. Managing those demands while keeping production costs competitive will be a continuing responsibility.

The 32-nanometer starting point offers practical uses in industrial and commercial products, while the planned improvements from 2028 to 2030 provide a period for building manufacturing experience. Progress will depend on sustained government support, effective plant management, successful training and markets where Vietnam can compete.

Vietnam's semiconductor push now brings together domestic fabrication, locally owned assembly and testing, foreign investment and workforce programmes. The end of 2027 is Viettel's next major production deadline, followed by the process improvements planned through 2030.

Key Points

• Vietnam broke ground on its first semiconductor fabrication plant on January 16, 2026, at Hoa Lac Hi-Tech Park in Hanoi.
• Viettel is developing the 27 hectare facility under a Ministry of National Defense mandate.
• Pilot production of 32-nanometer chips is targeted for the end of 2027, with process improvements planned from 2028 to 2030.
• The plant is intended to support research, training and chip supplies for telecommunications, aerospace, automotive, medical and industrial uses.
• Vietnam's 2030 strategy targets at least 100 design companies, one fabrication plant, 10 assembly and testing facilities, and semiconductor revenue exceeding $25 billion annually.
• The workforce programme seeks 50,000 chip design engineers by 2030, with the total chip workforce projected to exceed 100,000 by 2040.
• CT Semiconductor's separate assembly and testing project targets capacity of 100 million chips annually by 2027.
• Vietnam recorded $32.4 billion in chip exports in 2023, ranking eighth globally.