Nvidia’s Plans for Chip Manufacturing in Vietnam

Nvidia has expressed its intention to transform Vietnam into a “major chip manufacturing hub,” according to the Vietnamese government. This announcement is in line with Nvidia’s strategy to reduce its reliance on Taiwan for chip production.

During a meeting with the Vietnamese Prime Minister, Nvidia CEO Jensen Huang revealed the company’s plans for investment in Vietnam. Notably, Nvidia has already invested $250 million in the country. Although the exact scale of this potential investment is not yet clear, Huang emphasized the positive prospects for future cooperation between the United States and Vietnam.

Global concerns surrounding the vulnerability of Nvidia’s current manufacturing hub in Taiwan, where it collaborates with contract chip maker Taiwan Semiconductor Manufacturing, have prompted increased investments in semiconductor manufacturing. This trend is driven not just by economic factors but also considerations of national security.

In response to these developments, Vietnam aims to train 50,000 high-quality engineers specializing in semiconductor chip design by the end of the decade, as stated by the Vietnamese government.

As a result of ongoing U.S.-China tensions, Nvidia’s shares experienced a slight decline of 0.5% in premarket trading on Monday, reaching $472.54. Similar concerns also affected the American depositary receipts of Taiwan Semiconductor Manufacturing, which saw a 0.3% decrease.

Nvidia’s decision to explore chip manufacturing opportunities in Vietnam aligns with the wider trend among chip makers diversifying their manufacturing locations. The Wall Street Journal recently reported that New York state is partnering with Micron Technology and IBM to invest $10 billion in a semiconductor research facility, focusing on next-generation chip manufacturing. Additionally, Micron is expanding its operations by investing in a chip assembly site in India, alongside its existing production facilities in Japan and Taiwan.

In conclusion, Nvidia’s plans for chip manufacturing in Vietnam reflect its determination to establish a robust and diversified production network. With the support of the Vietnamese government and its commitment to training high-quality engineers, the country is well-positioned to become a significant player in the global semiconductor industry.