As Vietnam and the US enter a new phase of economic relations, American companies are preparing to offer an expansion in investments.
Intel Products Vietnam joined a huge business delegation to Vietnam last week, led by its vice president and general director Kim Huat Ooi, to meet with Vietnamese Deputy Minister of Trade and Industry Nguyen Sinh Nhat Tan.
The delegation included well-known names such as 3M, Abbott, Amazon, Bell, Chubb Life, Coca-Cola, and many others.
Ooi said that Intel has carried out initiatives to reduce power use at its factory and wants to do more, but is waiting for more specific support to improve the company’s operational efficiency in Vietnam.
Having been operating in Vietnam since 2006 with a total investment of $1.5 billion, its chip factory has seen success, with total export value at $10-11 billion in 2023, contributing to enabling Vietnam to join the global semiconductor supply chain.
Semiconductor production is among the most appealing areas for US businesses in Vietnam currently. While Intel, Meta, Synopsys, and Qualcomm are also making strong moves in the local industry, the list of interested US companies continues to expand. For example, semiconductor manufacturing equipment provider Lam Research and Seojin of South Korea announced a collaboration in chip production in Vietnam on March 20.
Vietnam’s growing attention to developing AI, the vehicle industry, and semiconductors, as seen through a number of new policies and strategies, gives motivation for foreign-led enterprises.
At last week’s Vietnam Business Forum, Prime Minister Pham Minh Chinh said, “Vietnam aims to prioritise high-tech and environmentally friendly projects in its attraction to create motivation for digital transformation, green transformation, and circular economy development. This is in addition to emerging fields such as semiconductor chips, AI, hydrogen, and others to deeply participate in regional and global production and supply chains.”
According to the US-ASEAN Business Council, US companies are eager to explore new opportunities and potential in Vietnam. Moreover, the US business community seeks to identify ways to support the implementation of initiatives and deliverables outlined in the upgraded Vietnam-United States relations to a comprehensive strategic partnership, which occurred last September.
US Ambassador to Vietnam Marc Knapper said the US business delegation to Vietnam last week not only reflected the commitment of the government but also the initiative of the US private sector.
“Vietnam has a crucial position in the global supply chain to ensure peace, security, and prosperity for the region,” he said. “US businesses are interested in Vietnam and want to promote cooperation in many fields to have good products that serve the interests of both countries. Now is a critical time in the relationship between the two countries, and towards the goal of enhancing long-term relations.”
US-Vietnam relations in the past six months have already helped to deepen commercial, economic, and tech ties between the two countries.
Vietnam attracted $626.32 million worth of US funding in 2023, being among the top 10 foreign investors in the country. More importantly, despite considerable challenges posed by headwinds in the global economy, the US remains Vietnam’s biggest export market, driving growth throughout Vietnam.
Le Net, a lawyer at LNT & Partners said, “US businesses have taken the last few months to seek more ways to support future initiatives. I have been working with a number of new clients from the US who want to enlarge investment in the country, while some others are studying the market. There will probably be a big rise in US funding in the future.”
While making new plans, US corporations are proposing supporting policies to facilitate their next steps ahead.
Specifically, Intel suggests that tax certainty is important to make long-term business decisions, so a competitive tax landscape that supports manufacturing and innovation (including tax rate relief) remains important.
“We would encourage the government to consider modernising business support incentive programmes that maintain and increase Vietnam’s competitiveness and its ability to draw in and retain large-scale financiers,” said Phung Viet Thang, country manager of Intel Vietnam.
Joseph Uddo, chairman of the American Chamber of Commerce in Hanoi, also said, “Government action can help the country maintain its competitive edge as global investors seek manufacturing destinations throughout the world. In this regard, our focus is on Vietnam’s priorities of removing bottlenecks in resource mobilisation, production, and business; addressing energy development needs and accelerating the transition to clean and renewable energy; unlocking the full potential of the digital economy, and more besides.”
Vietnam Investment Review
