Vietnam’s chip bet –and America is all in

Hanoi hopes semiconductor manufacturing will unlock the next opportunity in its economic rise. With an ambitious goal to enter the middle-income bracket by 2030 and to become a developed country by 2045, Vietnam sees innovation and digital transformation as “golden keys” to unlock the doors to its new phase of development. Hanoi has placed a lot of emphasis on its bid to emerge as a global semiconductor hub, drawing widespread interest from governments and tech leaders alike, with the United States in particular committed to facilitating its growth as a counterweight to China. In February, US President Donald Trump made a landmark decision that the United States’ would remove Vietnam from the export control list, where it had been placed alongside China and Russia since the Cold War years. Once implemented, this would allow Vietnam to access cutting-edge technologies employed in making the most advanced chips. Vietnam sees the 2024–30 time period as its “era of national rise”, a critical window during which the rules of the new world order would be written. The term, coined in 2024 by Communist Party chief To Lam, symbolises how Vietnam sees its power trajectory in a rapidly transitioning and fragmented world order. Vietnam’s chip diplomacy is also hoping for a big win in talks to set up an R&D and semiconductor training centre in the country with ASML, the world’s sole manufacturer of the Extreme Ultraviolet Lithography technology. The company has been exploring the possibility of establishing an important node in its supply chain in Vietnam. Attaining technological autonomy in a critical domain such as semiconductors is almost akin to a holy grail for self-help and survival in contemporary geopolitics. Yet, interdependence continues to be one of the defining features of the evolving power dynamics around semiconductors. In this milieu, middle powers in the Indo-Pacific and beyond have sought to attain highly specialised capabilities to establish themselves as valuable players in the global tech order. This trend has further been catalysed by an overall quest for technological autonomy and self-reliance in critical technology domains. For any small or middle power looking to emerge as a strong contender within the complex global semiconductor value chain evolving around the US-China tech rivalry, four central prescripts from Vietnam’s approach are noteworthy. To this end, Hanoi’s “chip diplomacy” has been both persistent and tactful while seeking to ease the way for Vietnam to realise its ambitions. The signs of growing global confidence in Vietnam’s potential to emerge as an alternative to China are apparent, particularly in the United States. Vietnam has also indicated its willingness to further a US vision on supply chain security, including those envisaged under the CHIPS Act, 2022. In addition to joining the International Technology Security and Innovation (ITSI) Fund set up under the Act to support semiconductor supply chain diversification, Vietnam has also engaged with the Indo-Pacific Economic Framework. What sets Vietnam apart from other middle powers is a semiconductor strategy that is geared toward clear goals, synchronised to strengthen the various elements of the complex chips ecosystem. The agility and resilience of its industry is further enhanced by openness to international collaboration. With the United States batting for Vietnam to emerge as a key cog in the semiconductor supply chain, the country may evolve as a chip leader in the decades to come. By Anupama Vijayakumar – The Interpreter / Lowy Institute – May 15, 2026

Related posts:

1. Vietnam, India Sign MoU On IT, Electronics Cooperation The Vietnamese Minister of Information and Communications (MIC), Nguyen Manh...
2. Vietnam semi plan Vietnam intends to have 3 fabs, 300 design houses and...
3. Expert sees Ho Chi Minh City as future ‘Silicon Valley’ of Southeast Asia Ho Chi Minh City has the potential to emerge as...