Da Nang licenses US company to build $110 mln semiconductor plant

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The plant will make crystal silicon blocks, assemblies made of silicon, ceramic, quartz, sapphire stone, glass, metal, alloy, nonmetals, plastic polymers, and other semiconductor materials for semiconductor and electronics machinery and equipment, according to Vnexpress.

It will be the park’s second-largest foreign project.

The plant, which covers 10.22ha, will commence construction in the first phase in the second quarter of 2021 to become operational in 2023.

It will produce 2.1 million products and 704 tonnes of silicon dioxide in the first phase before increasing to 5.8 million products and 792 tonnes of silicon dioxide in the second phase.

The company is owned by Americans Ha Vinh Ly and Nhe Thi Le, who also own Hayward Quartz Technology Inc in Silicon Valley in the U.S. It supplies a number of major original equipment manufacturers.

An artist's impression of the semiconductor manufacturing plant United States Enterprises in Da Nang City. Photo courtesy of Da Nang Hi-tech Park and Industrial Zone.

The largest foreign investment in the park is by the Sunshine aerospace components factory belonging to another U.S. company, Universal Alloy Corporation.

Đà Nẵng authorities have been seeking investors from Silicon Valley and the US investing in healthcare, high-tech industries, artificial intelligence (AI), education, real estate, and automation at Đà Nẵng Hi-tech Park and Information Technology Park.

According to the authority of Da Nang Hi-tech Park and Industrial Zone, another project, the Telala Đà Nẵng plant, under the Inoue Ribbon Industry of Japan, was built with a total of $6.6 million in the supportive industry for garment and textile firms.

The plant began operation at Hòa Khánh Industrial Zone in January after a year of construction, creating 140 jobs and an export turnover of $3.5 million per year, said Vietnamnews.

Despite COVID-19, the Da Nang Hi-tech Park and Industrial Zone granted investment licenses to 16 new projects with a total of $95.6 million in 2020.

To date, the Da Nang Hi-tech Park and Industrial Zone has drawn 364 domestic projects worth VNĐ26 trillion ($1.1 billion) and 129 foreign direct investment projects worth $1.7 billion.

Vietnam's semiconductors market to grow by $6.16 billion in next five years

The semiconductors market in Vietnam is poised to grow by $6.16 billion during 2020-2024, progressing at a compound annual growth rate of almost 19 percent during the forecast period, according to the report by global technology research and advisory company Technavio.

The growth in the use of the Internet of Things (IoT) is one of the major drivers for the growth of the semiconductors market in Vietnam as it allows the transfer of data over a network without requiring human-to-computer or human-to-human interaction.

Moreover, smart devices and connected devices are embedded with software, electronic components, and sensors with computer network connection capability, which enable them to collect and transmit data. IoT devices require ultra-low-power processors which increases their performance. Therefore, the increase in power efficiency enhances the battery life of devices, which is important for mobile computing devices such as notebooks, ultra-portables, and wearables.

Vietnam's semiconductors market is forecast to accelerate tremendously with IoT adoption. Photo: VIR

Additionally, IoT devices also require ICs which ensures that the microprocessor or microcontrollers start in the same condition, which protects the device. Hence, the increasing use of IoT in Vietnam will lead to the growth of the semiconductors market in the country during the forecast period.

The growing demand for high processing power for mobile and other computing devices also contributes to the growth of the semiconductors market in the consumer electronics segment. The demand for consumer electronics is high due to the availability of low-cost labor and favorable investment incentives.

In general, Vietnam's semiconductors market is fragmented, and the degree of fragmentation will remain the same during the forecast period. Samsung Electronics Co., Ltd., SK Hynix Inc., STMicroelectronics NV, Texas Instruments Inc., and Toshiba Corp. are some of the major market participants.

Although the growing use of IoT will offer immense growth opportunities, the cyclic nature of the semiconductor industry will challenge the growth of the market participants. To make the most of the opportunities, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.

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