March 5, 2025 /SemiMedia/ — Vietnam has approved a 12.8 trillion dong ($500 million) project to build its first wafer fabrication plant, aiming to boost its domestic semiconductor industry and support national defense, high-tech sectors, and research needs.

Prime Minister Pham Minh Chinh will personally oversee the selection of private companies collaborating with the government on this initiative. The project will receive up to 12.8 trillion dong in government funding to attract investors and advance local chip technology.

Under Vietnam’s recently signed 2030 Semiconductor Development Strategy, part of its 2050 Vision Plan, the government offers a 30% direct subsidy for eligible semiconductor projects, capped at 10 trillion dong ($400 million). However, the wafer fab project has secured a larger government allocation, highlighting Vietnam’s strategic commitment to chip manufacturing.

Additionally, Vietnam provides tax incentives, allowing semiconductor firms to retain 20% of taxable income for reinvestment into the local semiconductor ecosystem.

Vietnam’s semiconductor landscape includes key domestic players like Viettel, which has developed a 5G chipset, and FPT Corp., the country’s largest technology and IT services group, which reported over $1 billion in revenue in 2023.