Samsung invests US$850 million to build a semiconductor factory in Vietnam

According to KBS reports, South Korea’s Samsung Electronics Co., Ltd. held a board meeting on the 23rd and decided to invest US$850 million in the installation of Flip-chip Ball Grid Array (Flip-chip Ball Grid Array) equipment used to manufacture semiconductor chips in a production plant in Vietnam.
The flip-chip ball grid array is a connecting material for transmitting electrical signals and power between the semiconductor chip and the motherboard.
Samsung plans to inject investment funds in phases from now to 2023. Among them, the Vietnam factory is the main production base, while the factories in Suwon and Busan, Gyeonggi Province, South Korea will focus on core technology development.
Samsung is a leading company in the manufacturing of flip-chip ball grid arrays for mobile phone system semiconductor chips (without memory function).
Currently, Samsung has 6 production plants in Vietnam and is building a research and development center. Samsung’s investment in Vietnam amounts to more than 17.7 billion U.S. dollars, and currently has about 110,000 employees. In 2020, the company’s export volume will exceed 56 billion U.S. dollars.
Under the severe and complex background of the new crown pneumonia epidemic, Samsung still grew by 10% from January to July. The representative of Samsung (Vietnam) stated that if the company’s factory in Ho Chi Minh City resumes production as planned, the company can exceed its export target for this year.
It is expected that by the end of 2022, Samsung’s R&D center in Hanoi will be put into operation, and it is expected that it will contribute to the development of Vietnam’s industry and information technology. It is estimated that about 3000 engineers will work here.

Vietnam’s semiconductor layout

Semiconductor (semiconductor) is the main raw material for IC (Integrated Circuit). The use of conductive directional semiconductors is used to manufacture logic circuits so that the circuit has the function of processing information. IC designs and miniaturizes semiconductor devices and Electronic component circuits and then manufactures them in semiconductors. The function of processing information is strengthened on the surface of the wafer. The IC industry chain includes from upstream wafer materials to IC design, IC manufacturing (foundry), IC packaging and testing, and IDM (Integrated Device Manufacturers) integrated semiconductor plants. In the early days, most of the vertical integrated component manufacturing from IC design, manufacturing, packaging, and testing. Since the end of the 1980s, Taiwan has tended to a professional division of labor as the design and production have become more and more complex. The development of Taiwan’s IC upstream and downstream industrial chain has a complete design output value worldwide. Ranked second only to the United States, Taiwan ranks first in the world in terms of foundry and IC packaging and testing output value, and Taiwan accounts for more than half of the world’s top ten professional packaging and testing companies.
As for Vietnam, in 2012, the Ho Chi Minh City People’s Committee officially launched the Ho Chi Minh City IC development plan and invested in the establishment of Saigon Semiconductor Technology Inc. (SSTI) in 2013, from cultivating IC companies to building manufacturing and design centers. Set out to promote the development of the semiconductor and IC industries. SSTI is located in Saigon Hi-Tech Park (Saigon Hi-Tech Park; SHTP) as Vietnam’s first semiconductor wafer manufacturing and IC packaging and testing plant. Design modification and engineer training, products not only meet domestic demand, but also promote the development of Vietnam’s semiconductor industry.
On this occasion, the Vietnamese government has begun to promote the transformation and upgrading from the traditional labor-intensive industries. The Vietnamese government is encouraging large-scale development of technology-intensive semiconductor-related technology industries. At present, the upstream of Vietnam’s IC industry chain includes Silicon Intellectual Property (SIP; IP) design and IC design, the middle stream has IC wafer manufacturing, related production process inspection equipment, photomasks, chemicals, etc., and the downstream has IC packaging. Testing, related production process inspection equipment, components (such as substrates, lead frames), IC modules, IC channels, etc., except for the technical aspects of IC design and foundry that need to be strengthened, upstream materials, midstream components, downstream assembly and The system product industry chain is complete, and electronics and related components have become Vietnam’s largest export industry. According to the survey, the main projects for foreign investment to set up factories recently are printed circuit boards (PCBs), connectors, camera modules and passive components. The semiconductor industry cluster seems to be taking shape in North Vietnam, while the domestic consumer electronics industry cluster is mainly in South Vietnam. The rapid development of Vietnam’s semiconductor industry will promote the transformation and upgrading of electronics assembly and manufacturing in Vietnam, create huge economic output and provide more employment opportunities.
According to expert assessments, Taiwan can receive transfer orders from global IDM factories in 2020, and in the short term, Taiwan’s advanced manufacturing process, high-end packaging and testing semiconductor production and output value will still lead the world. It is expected that the market’s demand for semiconductor technology products will increase sharply. In addition to the US-China trade war, Vietnam has become the first choice for Taiwan’s technology industry and the transfer of production from China. Therefore, the Vietnamese factory of Taiwan’s Xuran Group will officially enter the volume in the second half of 2020. Due to the increased demand for precision and filtration efficiency of liquid filtration in the semiconductor and electronics, mechanical equipment, and food chemistry industries, the establishment of the Vietnam factory will further deepen the export market in Southeast Asia, Europe, and the United States.
In view of the fact that the focus of the global IC design industry will shift to the field of mobile devices, Vietnam has also made good use of its geographical advantages in importing materials, components, assembly, and processing economy by bordering mainland China, and large automobile manufacturers in Japan and South Korea have set up factories there. The formed industrial chain has attracted major electronics manufacturers to enter Hanoi, Haiphong, and Bac Ninh, North Vietnam, towards a capital-intensive and technology-oriented electronic technology industry cluster, and strive to build Vietnam into the next world factory.
According to Ho Chi Minh City Semiconductor Industry Association (HSIA) Chairman Nguyen Anh Tuan, the biggest challenge in Vietnam’s semiconductor industry is the lack of technical operations and monitoring personnel. The demand for technical talents is increasing by at least 20% every year but the supply exceeds demand. In any case, Vietnam’s integrated circuit (IC) and semiconductor turnover in 2019 is close to 200 million U.S. dollars. The market potential will provide huge investment opportunities for domestic and foreign companies. Local Vietnamese companies are also actively investing in the IC industry, including capacity expansion and purchases. And wait, and this wave of continuous active investment is expected to have a historic and far-reaching impact on the further development of Vietnam’s semiconductor industry.
According to statistics, Vietnam’s semiconductor industry is expected to reach US$6 billion in 2021, but due to limited supply of integrated circuit (IC) manufacturing, it still lags behind other Southeast Asian countries. Although the manufacture of integrated circuits in Vietnam is still in its infancy, the design aspect is well developed, with about 20 companies providing product design services.
In Vietnam, companies investing in the semiconductor industry are eligible to enjoy preferential policies, such as zero corporate income tax for the first 4 years, 5% for the next 9 years, and 10% for the next 15 years, instead of the standard 20% tax rate. In addition, the industrial park will provide 10% to 15% of training costs for semiconductor companies.
The Vietnamese semiconductor industry is dominated by foreign companies. Intel leads, and other companies include Juki, Renesas, Esilicon, etc. Local participants include Saigon Semiconductor Technology Company, Vietnam Microelectronics Company and VSMC.

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