Samsung to invest US$3.3 billion, produce new chip parts in Vietnam amid China’s concerns over US-led semiconductor alliance

Samsung Electronics plans to make an additional US$3.3 billion investment in Vietnam this year, enabling the South Korean technology giant to start producing semiconductor components in the Southeast Asian country by July 2023.

That investment and various business initiatives were discussed by Samsung president Roh Tae-moon, head of the company’s MX business for mobile devices, in a meeting last Friday with Vietnamese Prime Minister Phạm Minh Chính, according to a report by local newspaper Lao Dong.

Samsung, the world’s largest memory chip maker, is preparing trial production of its flip-chip ball grid array, a surface-mount packaging technology used for integrated circuits, at the Samsung Electro-Mechanics facility in Thái Nguyên province, in the northeast region of Vietnam. Samsung also plans to establish a new research and development centre in the Vietnamese capital of Hanoi at the end of this year or in early 2023.

The latest initiatives in Vietnam reflect Samsung’s increased effort to diversify its manufacturing supply chain, even as China remains concerned over South Korea potentially joining the United States-initiated Chip 4 Alliance.

That partnership – which the US has envisioned to include South Korea, Japan and Taiwan – threatens to exclude China from global semiconductor supply chains and to harm the country’s technology self-sufficiency drive.

South Korea is a major supplier of memory chips to China, where Samsung and SK Hynix have both made hefty investments to build and operate semiconductor foundries.