With a projected investment of 39 trillion dong (about one point five billion US dollars), Samsung Electronics is stepping up efforts to establish its presence in Vietnam by investing in a new semiconductor testing facility. The information has been taken directly from a proposal document submitted to the local authorities back in April by Samsung and the construction work can be seen at an industrial park about sixty kilometers to the north of Hanoi. I have been around the semiconductor industry for many years and have seen how these big investments typically begin with just one document, and then all of a sudden you see the earth moving equipment on site. That’s exactly what went on here. It will specialize in testing memory chips, such as DRAM and NAND, and is expected to open its doors in November 2027. The significance of this is that it is Samsung’s first chip testing facility in Vietnam, a nation which has been quietly building its position in the global chip supply chain.
In terms of expertise—it’s a real and continuous problem in electronics—this investment was appropriate. The document is clear that the new plant is intended to make a significant contribution towards relieving the shortage of memory chips worldwide, which has been compounded by the high demand from artificial intelligence data centres. As AI operators scramble to purchase the latest and greatest chips, the manufacturing capacity for the older but still vital memory chips is channeled into other sectors, such as smartphones, laptops and cars, whose cost is inevitably a consequence. This has been the trend in the past few years; a surge in one area slows another area down. According to the proposal, the factory will concentrate on legacy chips, chips that are not as exciting as AI-specific processors, but are still very important for most electronics. The proposed plant, which is mainly being submitted for environmental approval, would boast a one-hundred-fifty three billion gigabit (Gb) testing capacity annually for DRAM chips and a one-hundred-fifty five billion gigabit (Gb) annual testing capacity for NAND memory chips.
“Samsung has long viewed Vietnam as a strategic manufacturing base, but this testing plant is a new level as testing is a very special process in semiconductor manufacturing that cannot be simply put in any machine,” said one of them. Both countries consider the project an opportunity to go beyond mere assembly, into higher-tech operations, and the Vietnamese government has been very supportive of this project, the same source added.
Just looking at the contents of the proposal document, it appears Samsung has no intention of stopping at one point 5 billion dollars. The report also states that there may be a further $2.5 billion to be raised from future profits, but this is not a definite commitment. It’s a form of “if” language that is frequently used in business proposals, but it doesn’t lack in confidence. If the testing plant turns out to be a success and demand is high, Vietnam may see Samsung invest even more in the facility, or perhaps even in other nearby operations.
As far as trust is concerned, it is just as well that this announcement is considered with a level head. This is mostly welcome news for Vietnam. The country has been making efforts to move from making semiconductors at low end to the higher end and a testing plant is a step in the right direction. Local workers will be exposed to more advanced equipment and processes, while the region’s industrial infrastructure and linkages will likely be enhanced. But there has been a quiet concern among some that Vietnam has become too reliant on one corporate giant. In the world’s most energy-poor nation, Samsung already has large electronics factories and that reliance is further strengthened by the addition of a semiconductor testing facility. The one local economic analyst quoted said, “We are glad that Samsung has come because it has brought jobs and technology transfer but we should ask ourselves what will happen if Samsung switches gear to another country in five or ten years time? That’s not a problem now but it’s a fair one.”
The environmental factor is another factor to be taken into account. The document for the proposal was sent particularly to secure environmental permissions, indicating local authorities are taking notice of emissions, water consumption, and waste from the testing. In semiconductor testing, the consumption of chemicals and energy is less than in wafer fabrication but still present. The public’s response in the province where construction is taking place, Thai Nguyen, has been somewhat optimistic. The residents in the residential area around the industrial park have also voiced their concerns about long term environmental monitoring, and are happy with the jobs. We have strict conditions in the permit. The plant must satisfy all the Vietnamese environmental standards and we will be doing regular inspections, said a local official.
