'Shining' semiconductor technology, AI

In July 2024, Foxconn Group was granted an investment certificate by Quang Ninh province for two projects worth 551 million USD to produce smart entertainment products and smart systems. (Photo: Quoc Nam)

Data from the Foreign Investment Agency ( Ministry of Planning and Investment ) shows that in the first 11 months of 2024, FDI disbursement in Vietnam is estimated at 21.68 billion USD, up 7.1% over the same period last year. This is the third consecutive year that Vietnam has achieved FDI disbursement of over 20 billion USD.

As of November 2024, Vietnam has 41,720 valid FDI projects with a total registered capital of 496.7 billion USD. The accumulated realized capital of foreign investment projects is estimated at nearly 318.9 billion USD, equivalent to 64.2% of the total registered investment capital in effect.

Three factors to attract investment

The Foreign Investment Agency said that investment capital continues to focus on provinces and cities with many advantages in attracting foreign investment such as: good infrastructure, stable human resources, efforts to reform administrative procedures and dynamism in investment promotion... Ten localities are Bac Ninh, Quang Ninh, Ho Chi Minh City, Hai Phong, Hanoi , Binh Duong, Ba Ria - Vung Tau, Dong Nai, Nghe An and Bac Giang, accounting for 79.6% of new projects and 69.4% of the country's investment capital in 11 months.

Deputy Director of the Foreign Investment Agency Vu Van Chung said that in the context of FDI capital flows in the world continuing to decline and forecast to grow at a moderate level, Vietnam is considered a bright spot.

FDI capital flows into the S-shaped country remain stable and tend to increase, focusing on high-tech sectors such as chip manufacturing, semiconductors, electric vehicle batteries, components, electronic products, etc. "These are the clearest evidence of the trust of foreign businesses and investors in Vietnam's business investment environment, in the policies of the Government and Prime Minister," said Mr. Vu Van Chung.

Meanwhile, Mr. Andrea Coppola, Chief Economist and Manager of the Equitable Growth, Finance and Institutions Program of the World Bank (WB) in Vietnam, Laos and Cambodia, assessed that Vietnam's ability to attract foreign investment is strongly promoted by three main factors.

First, the fact is that Vietnam's business environment offers stability to investors.

Second, the international community appreciates the Vietnamese Government's continuous efforts in improving the business environment.

Third, Vietnam has made good use of its strategic position as a “bridge” between the two superpowers, China and the United States. Thanks to all this, Vietnam has been able to attract a large amount of foreign investment in recent times.

Technology, semiconductors, AI "fan the flames" of FDI capital flows

The highlight of FDI capital flows in the past year was that many large investors and corporations in the world in the fields of semiconductor manufacturing, technology and artificial intelligence (AI) came to "knock on the door" of Vietnam.

For example, Amkor (Korea) in Bac Ninh increased its capital by 1.07 billion USD in early July 2024 for the Semiconductor Materials and Equipment Manufacturing, Assembly and Testing Factory project. This is the first billion-dollar project of 2024, contributing quite positively to the total foreign investment capital registered in Vietnam in the first months of the year.

Also in July, Foxconn Group was granted investment certificates by Quang Ninh province for two projects worth 551 million USD to produce smart entertainment products and smart systems. 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.

In addition, many large technology corporations such as Samsung, LG, Posco, etc. have been planning to invest billions of dollars more in Vietnam in the near future. Mr. Jeong Cheol Dong, CEO of LG Display, revealed that the corporation 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.

In addition, a series of “big guys” in the world’s semiconductor industry have been investing heavily in Vietnam. Among them are many big names in the world’s semiconductor industry such as Intel, Ampere, Marvell, Cadence, Renesas, Synopsys, Qorvo… On the contrary, a number of domestic companies have also joined the semiconductor industry market such as Viettel, FPT, VNChip…

Most recently, the return of Mr. Jensen Huang, General Director of NVIDIA Corporation earlier this month, has “heated up” the AI ​​industry. The Vietnamese government has signed a cooperation agreement with the leading US technology corporation NVIDIA to establish an AI Research and Development Center (R&D) in Vietnam. And the Southeast Asian country has officially become the third destination where this corporation has invested in an AI research and development center, after the US – where NVIDIA is headquartered and Taiwan (China).

Mr. Vo Xuan Hoai, Deputy Director of the National Innovation Center (NIC - Ministry of Planning and Investment) assessed that there are many reasons for NVIDIA and a series of "big guys" in semiconductors, technology, and AI to choose Vietnam as an investment destination, such as the increasingly improved quality of human resources, strategic geographical location, political stability, market size of 100 million people, and open investment policies.

There are many reasons why NVIDIA and a series of semiconductor, technology, and AI giants have chosen Vietnam as an investment destination: the quality of human resources is increasingly improving, strategic geographical location, political stability, a market size of 100 million people, and open investment policies.

New breakthrough

Since the Law on Foreign Investment in Vietnam was passed (December 1987), FDI capital flows have had a positive impact on the Vietnamese economy, especially exports. FDI accounts for up to 70% of the country's export turnover.

Meanwhile, according to Prof. Dr. Hoang Van Cuong, member of the National Assembly's Finance and Budget Committee, exports are the "launching pad" of the economy. It is forecasted that FDI attraction will remain very good in 2025 thanks to investors' confidence in the internal strength of the Vietnamese economy. Other factors such as stable exchange rates also help investors feel secure.

However, the member of the National Assembly’s Finance and Budget Committee noticed that the trend of FDI investment is changing. If in the past, investors mainly sought areas with cheap labor, today they mainly invest in science and technology and high technology. That will be the driving force to help Vietnam achieve double-digit growth in the future.

Affirming that Vietnam is becoming one of the most attractive destinations for FDI, Mr. Victor Ngo, General Director of UOB Vietnam Bank, said that the Vietnamese Government has issued a Decree on the establishment, management and use of the Investment Support Fund to directly support enterprises in this field in training, human resource development, investment in creating fixed assets, and manufacturing high-tech products. "This is a breakthrough in stabilizing existing FDI sources and creating a wide corridor for attracting new FDI sources to the country in the future," said Mr. Victor Ngo.

Minister of Planning and Investment Nguyen Chi Dung affirmed that the Government is always determined to perfect institutions, improve the investment environment, handle backlogs and obstacles; and promote investment in strategic and important infrastructure projects. In particular, Vietnam is determined to attract investment in high-tech industry and the semiconductor industry. The country has been building an attractive business environment with many incentives for high-tech enterprises; including the application of special investment procedures.

Such efforts by the Government will be the basis for FDI investors to continue choosing Vietnam as a destination, helping the country "shine" in the new era.