South Korea's Hana Micron to invest $1bn in Vietnam chip production

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Vietnam is courting global chipmaking companies after years of stalled attempts to grow its semiconductor industry. (NIKKEI montage/Source photos by AP and Getty)
LIEN HOANG, Nikkei staff writerOctober 2, 2023 16:29 JST

HO CHI MINH CITY -- Hana Micron plans to pour $1 billion into chip production in Vietnam by 2025, the latest in a wave of semiconductor investments flooding into the communist country.

The South Korean manufacturer of chip packaging and memory products told Nikkei Asia it is moving equipment to its new, second factory in Bac Giang province to "prepare for production and we have a busy schedule with customer audits, etc." The province hosts three Apple suppliers and, with neighboring Bac Ninh, is known for making the bulk of Samsung phones globally.

The chip industry was a focus of U.S. President Joe Biden's trip to Vietnam in September, when his office said U.S. companies Amkor and Marvell will expand in the country. Days later Vietnam's Prime Minister Pham Minh Chinh toured the U.S. facilities of Nvidia and Synopsys seeking further investment.

"Hana Micron's Bac Giang project plays a key role in the socioeconomic development of the region and ... follows the development direction of the government," human resource manager Hwang Chul Min told Nikkei. "It will create opportunities to attract more high-tech projects and lay the foundation for the development of the semiconductor production ecosystem."

The string of recent announcements has lent momentum both to global chipmakers, which are diversifying supply chains due to geopolitics, and to Vietnam, which aims to attract the companies after years of stalled attempts.

But challenges remain. Samsung, a client of Hana Micron, declined government requests to build a chip factory, with one source telling Nikkei the company "already invested too much in Vietnam." The country also saw its biggest chip investor, Intel, choose rival Malaysia for a major expansion.

Vietnam is struggling to keep up with skills and infrastructure demands as well. Hana Micron will employ 4,000 people and cooperate with Vietnam-Korea Industrial Technical College for hiring, according to a post on Saturday on the government website of Bac Giang. The producer has a factory in Bac Ninh, too, where its job postings seek staff for information technology, sourcing, and production planning, as well as line workers.

"Hana Micron received special attention from Bac Giang province in providing conditions to ensure continuous production such as electricity and water," the provincial website said. In early June, power shortages forced the province, one of several, to schedule hours-long brownouts, a disruption that has concerned investors across the country and across sectors.

The web post added that Hana Micron's plant occupies six hectares, while "another semiconductor factory, invested in by Taiwan," will start operations in 2024.

Among other investors, chip software maker Synopsys has kept an eye on China risks as it shifts to Vietnam. The U.S. company joined the September launch of a Hanoi center for chip design, a specialization that Vietnamese companies FPT and Viettel are also pursuing.

The Southeast Asian country so far has failed to bring in the billions of dollars it would take to build an advanced plant for semiconductor fabrication.

"Vietnam still needs a unified, national approach to semiconductors," said a presentation by the government National Innovation Center at a Friday chip conference in Hanoi.

"Vietnam is poised for a breakthrough expansion of its semiconductor industry," Vice Minister of Information and Communications Nguyen Huy Dung said at the event, according to a statement. The country is "ready to welcome investors in the semiconductor industry with highly preferential mechanisms."

These include perks such as a possible four-year tax exemption, NIC said.

South Korea's Hana Micron to invest $1bn in Vietnam chip production

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