Vietnam has recently broken ground on its first domestic semiconductor fabrication facility, focusing on 32nm chips used in everyday applications such as consumer electronics, home appliances, and industrial equipment. The project, led by Viettel Group, marks the first time Vietnam has participated directly in chip fabrication – the most complex stage of the semiconductor production chain and one that has so far been beyond domestic capability.

Render of Viettel's chip factory in Hoa Lac Hi-Tech Park near Hanoi

This is an important milestone not only for the semiconductor sector, but also for Vietnam’s broader economy. Once operational, the facility is expected to help complete the domestic semiconductor ecosystem, allowing chip design companies, technology firms, and research institutions to shorten testing cycles and accelerate product development.

By localizing critical manufacturing capabilities, Vietnam can also reduce exposure to external supply disruptions, including those linked to U.S.–China trade tensions, while strengthening its position in the global value chain.

Over the longer term, mastering core R&D and production capabilities will support Vietnam’s goal of training a high-tech workforce of 50,000 chip engineers by 2030 and 100,000 by 2040.

In our view, this development reflects Vietnam's progress toward growing a digital economy contributing 30% of its GDP by 2030, with AI and semiconductors as key drivers. It also reinforces our medium-term outlook for Vietnam, as major infrastructure upgrades like this can provide a significant push to supporting industries, employment, and capital inflows – benefiting our portfolio companies over time.

The Kenno Vietnam Fund invests in high-quality consumer companies that benefit from Vietnam’s resilient economic growth and an expanding middle class driving domestic consumption. If you’re looking for exposure to one of Asia’s fastest-growing economies, feel free to reach out to us.