Bustling 'eagles' come to Vietnam

In 2023, there were continuous trips by high-ranking leaders of countries and the "largest ever" business delegation to Vietnam. In the context of difficulties in attracting global foreign investment, Vietnam emerged as a destination for quality foreign capital flows.

Opportunity to build semiconductor industry

During his visit to the US, on the evening of September 20, Prime Minister Pham Minh Chinh received leaders of several leading economic groups in the US and the world such as SpaceX, Pacifico Energy, Coca-Cola... At the meeting, Mr. Tim Hughes, Senior Vice President in charge of government relations and global business, and senior leaders of SpaceX said that the group plans to expand investment and wishes to provide Starlink service (satellite internet) in Vietnam.

Meanwhile, Pacifico Energy Group expressed its desire to invest in offshore wind power in Vietnam, while Coca-Cola said that in the near future, the group will produce in a green direction, protecting the environment... Previously, in the US capital Washington DC, the Prime Minister witnessed the signing ceremony of a memorandum of understanding between the National Innovation Center (Ministry of Planning and Investment) and Cadence Design Systems Group to develop products; signed with the University of Arizona to develop human resources for the semiconductor chip industry; the Ministry of Education and Training signed with Intel Group to develop human resources for the high-tech industry; the Department of Information and Communications Technology Industry signed a memorandum of understanding with the giant chip corporation Synopsys to support the development of the semiconductor chip industry.

Prime Minister Pham Minh Chinh arrived in the US on September 17, right after US President Joe Biden's visit to Vietnam (September 10-11). The joint statement on upgrading the Vietnam-US relationship to a comprehensive strategic partnership also acknowledged Vietnam's great potential to become a key country in the semiconductor industry. Both countries support the rapid development of the semiconductor ecosystem in Vietnam and actively coordinate to enhance Vietnam's position in the global semiconductor supply chain.

Among them, there is a statement on launching initiatives to develop human resources in the semiconductor field. The US will provide an initial seed funding of 2 million USD along with future support from the Vietnamese Government and the private sector. Present in the recent high-level US delegation to Vietnam were also leaders of large technology corporations in the semiconductor industry supply chain such as Amkor Technology, Synopsys, Marvell... and they all announced that they will cooperate in innovative technology and invest in production in Vietnam.

In fact, 2 out of 3 leading semiconductor technology suppliers in the world have factories in Vietnam. Of which, Intel has set up a factory in Vietnam for more than 10 years with an investment of nearly 1.5 billion USD to date. Samsung is also preparing to test the production of semiconductor chip grid products and will mass produce them at the Samsung Thai Nguyen factory in the near future...

In addition, also in September, Hana Micron Vina (Korea) inaugurated a semiconductor factory project in Bac Giang with an investment capital of 600 million USD, which is also the first semiconductor manufacturing project in the North. This group plans to increase investment to 1 billion USD by 2025, with the ambition to develop a new semiconductor industry ecosystem in Vietnam.

Next is the 1.6 billion USD semiconductor project being implemented by Amkor Technology Vietnam at Amkor's largest and most modern factory globally in Bac Ninh; Infineon Technologies AG - Germany's largest semiconductor chip manufacturer also announced the establishment of a semiconductor chip development center in Hanoi...

Manufacturing civil aircraft flaps for Boeing at MHI Aerospace Vietnam Co., Ltd., Thang Long Industrial Park, Hanoi

Pham Hung

In mid-September, after more than a year of being licensed, the Lego Group (Denmark) factory in Binh Duong is being urgently built, expected to be put into production in the second half of 2024. This is one of the billion-dollar projects that was granted an investment license right after the Covid-19 pandemic ended and disbursed on schedule, and is also Denmark's largest investment project in Vietnam. Notably, Lego has pursued a green strategy from the beginning, in line with Vietnam's green growth strategy, identifying FDI and private capital as pillars to implement green growth.

Energy expert Khuong Quang Dong (France) commented that Vietnam’s abundant rare earth resources have attracted countries that are mastering semiconductor technology. To escape dependence on a few partners, the US, Japan and South Korea… have sought out countries with abundant rare earth resources like Vietnam.

"Vietnam has valuable rare earth resources, but does not yet have environmentally friendly mining technology and deep processing technology. With a strategic materials manufacturing industry and strong economic growth, Vietnam will be an attractive investment destination for future industries from lithium batteries, electric cars, smartphones, to computers... This is the final stage that we need to overcome to build a mass high-tech industry," Dr. Khuong Quang Dong emphasized.

The first bricks have been laid by the "eagle" to build the nest.

Looking back, it can be seen that in 2023, Vietnam's attraction of foreign investment capital has a "rare" feature, which is the appearance of business delegations consisting of large "eagles" in the world, coming to explore business opportunities. That is a delegation of more than 50 US businesses operating in the fields of defense technology, pharmaceuticals, technology, semiconductors, finance, energy, entertainment... with big names such as Boeing, SpaceX, Netflix, Pfizer, Abbott, Citibank, Meta, Amazon... Reuters news agency affirmed that this is the most powerful US business delegation ever, showing the increasing interest of US businesses in Vietnam.

Previously, in June, the delegation of more than 200 companies accompanying South Korean President Yoon Suk Yeol to Vietnam included the chairmen of large corporations such as Samsung Electronics, SK, Hyundai Motor, LG, Lotte, Hanwha, Hanjin, Hyosung... On this occasion, South Korea and Vietnam signed a memorandum of understanding to establish a supply chain center for rare earths and other important minerals to ensure a stable supply for South Korean companies and encourage them to invest in Hyosung.

Following that, the official visit of Singaporean Prime Minister Lee Hsien Loong in August and most recently the historic trip of US President Joe Biden last September opened up many opportunities to attract high-quality capital. Up to now, there have been "eagles" who decided to lay the first brick to build a nest in Vietnam. Apple has opened an online store for the Vietnamese market, providing a full range of products and direct Vietnamese support for customers nationwide.

Reuters commented that this is a "paving the way" for the opening of direct retail stores by the "apple house", that Tim Cook (CEO of Apple) has "bet" on this emerging market, where the number of iPhones is not yet saturated. Boeing also opened a representative office in Hanoi and said it will invest in developing the supply chain of spare parts and aviation equipment in Vietnam. Or after the trip with more than 200 businesses accompanying the President of South Korea, LG adjusted its investment by another 1 billion USD, bringing the total investment capital to more than 2.05 billion USD and said it would invest another 5 billion USD in Vietnam; SK said it is considering a large investment in Vietnam through a hydrogen clean gas production project...

Vietnam has a great opportunity to develop the semiconductor industry.

Ngoc Duong

Diplomatic trips by senior leaders have brought about a great positive effect, and the upcoming application of the global minimum tax policy. To accelerate FDI, investors with green growth projects, environmentally friendly, sustainable development, financial services, etc. need to be considered with goodwill. The world and domestic situation shows that Vietnam still has considerable attractiveness in attracting FDI. We have potential and room to promote foreign capital attraction. However, it should be noted that in order to call for high-quality and green capital from large corporations, special attention must still be paid to infrastructure issues, premises, clean land, human resources, incentives in accordance with international practices and laws, etc. In particular, no matter how high-quality capital is attracted, it is necessary to pay attention to regulations on technology transfer, how to give domestic enterprises the opportunity to participate in the global supply chain. Dr. Vo Tri Thanh , Director of the Institute for Brand Strategy and Competitiveness Research

Expectations for high-quality capital from the US, South Korea, Singapore, Europe, etc. in 2023 are huge. Associate Professor, Dr. Nguyen Thuong Lang, Institute of International Trade and Economics, commented that what we expect from the trips of large global enterprises to Vietnam in recent times has been showing very positive signals. These are the decisions to lay the first bricks in Vietnam by the "eagles". Not only that, the number of manufacturing enterprises in the supply chains of these giants has also expanded their investments strongly.

He said: "According to a recent report by Wipo - the global innovation index - the number of FDI enterprises owning high technology in Vietnam has increased significantly. In the context of many concerns about the global economic recession, affecting FDI attraction, the continuous appearance of the world's "eagles" in the Vietnamese market has had important impacts on Vietnam's image in the eyes of foreign investors. From the big "eagles", they will attract other "eagles" in the value chain. The increasingly dense appearance of names like Boeing makes the dream of a center for manufacturing components for aircraft increasingly bigger, even a center for manufacturing components for aircraft, spacecraft, high technology in the shipbuilding industry... Vietnam once had that dream and hopes to reactivate it soon. In addition, Vietnam's policy on net emission reduction has really attracted investors from developed countries. Besides, FDI disbursement is at its highest level in 5 years. This also shows that foreign investors have taken action to anticipate the post-Covid-19 global economic recovery by accelerating investment expansion, opening offices, and researching the market. Thereby, FDI capital flows into Vietnam will recover sooner than the world.

Investment and business environment approaching international practices

In a discussion with Thanh Nien , most experts shared the view that a stable socio-political environment, a stable macro-economy, institutional reform efforts, and a move towards sustainable green development and net emission reduction are major advantages for Vietnam to attract FDI in the current context. In particular, the World Bank, in a report by the end of 2022, said that FDI in Vietnam has increased by 108 places since the Doi Moi in 1986. Specifically, from 3 million USD, ranked 136/160 countries globally to 19 billion USD in 2022, ranked 28th globally and 3/10 in ASEAN.

Clean energy attracts many foreign investors

Nguyen Nga

According to the Foreign Investment Agency, FDI capital in the first 8 months of 2023 increased by 8.2% over the same period last year, reaching more than 18 billion USD; FDI disbursement also reached a record high, more than 13 billion USD - the highest disbursement level in the past 5 years.

Prof. Dr. Nguyen Mai, Chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), assessed that there are many favorable factors that have happened very quickly in recent times. This is an opportunity for Vietnam to quickly grasp to accelerate the attraction of foreign capital. While countries around the world are competing in semiconductors, Vietnam is being highly appreciated by international media for its rare earth resources. This is an extremely valuable mineral resource, even more valuable than oil - an export source that generates 20% of the annual budget revenue.

"If we create 220,000 tons of rare earth, we can imagine earning tens of billions of dollars. That's not just money but also position in the world. The world today operates very simply, if you have anything to exchange with me, you have position. But if you depend completely on me, you will never be a competitor," Professor Nguyen Mai said, emphasizing that the US is the leading country in high technology, future technology, and source technology. Therefore, technological cooperation between the US and Vietnam is extremely important. Vietnam can completely rely on high technology to modernize and industrialize the country.

Many international organizations and foreign economic experts highly appreciate the determination of the Vietnamese Government in creating an investment and business environment that approaches international practices. The report of the Organization for Economic Cooperation and Development (OECD) on FDI in Southeast Asia also commented that Vietnam has made more efforts in creating conditions for FDI development than any other country in the region, being one of the markets with few policy barriers to FDI in ASEAN. However, Vietnam still needs to closely monitor policy changes of countries, foreign strategies of each country and especially the strategies of multinational corporations that have invested and will invest in the domestic market.

Sharing the same view, economic expert, Dr. Vo Tri Thanh - Director of the Institute for Brand and Competitiveness Strategy Research - commented that the foreign business delegations coming to Vietnam this year have many high-quality investors. FDI is always an important capital channel for the economy. Every move of Vietnam in reforming and expanding the investment environment and reforming institutions in the new situation is of interest to investors. In the context of the global economy showing signs of slowing down, Vietnam needs to take advantage of attracting high-quality capital after these important meetings and exchanges.

Thanhnien.vn