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South Korean firm signs agreement with chip factory manager in Vietnam

South Korean semiconductor manufacturer Signetics has signed an agreement with Vietnamese firm CNCTech in which the latter will operate a factory for the former in Vietnam’s Vinh Phuc province, The Investor is reporting. The US$100 million factory will make components for South Korea’s Samsung and SK and is expected to go into operation in 2025.

Of note, Vietnam has a breadth of experience in assembly, packing, and testing of semiconductor chips on the back of huge investment from firms like Intel and Amkor. Furthermore, regional and global free trade agreements to which Vietnam is a party position it well for this final stage of semiconductor chip supply chains.

That said, Vietnam’s semiconductor manufacturing has faced a number of challenges.

For one, the power supply has been unreliable. In the summer of 2023, blackouts gripped northern Vietnam and shut down production for some very-big tech brands–Canon, Samsung, and Foxconn, for example.

Moreover, high-skilled labour, the kind of labour that can design and engineer semiconductor chips, is limited. By some estimates Vietnam has just 6,000 chip engineers when it needs an estimated 20,000 by 2028.

See also: Vietnam’s Semiconductor Manufacturing Ambitions: Unpacked

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