According to a visiting U.S. ambassador, Washington is planning to invest in Vietnam to reinforce the US’s semiconductor chip industry, specifically, strengthen its supply chain to reduce reliance on China.
On August 9, 2022, as enacted by the 117th United States Congress and signed into law by President Joe Biden, the CHIPS and Science Act was implemented with a view to promote technological advancement and semiconductor production autonomy.
As recommended by the Organization for Economic Cooperation and Development (OECD), the US is planning to allocate resources from this fund to foreign investments. According to Jose Fernandez, the U.S. undersecretary of state for economic growth, energy, and the environment, the United States is currently focusing on seven nations (including Vietnam) as part of its CHIPS and Science Act fund, which offers $500 million for enhancing cybersecurity, semiconductor training, and business climates worldwide
Source: U.S Embassy in Hanoi
“We went through a list of countries that we felt had the potential to benefit from our support, and Vietnam was one of the first countries that we thought about” said Jose Fernandez in an interview.
He also stated that Vietnam had to act as well before it was too late to draw in investment in essential sectors, for instance, renewable energy and minerals that may be utilized to produce batteries, electric vehicles, and other implementations in the semiconductor chip industry.
Vietnam – A Potential Manufacturing Hub
As one of the leading exporters of the US in electronics, clothing, and food, Vietnam is considered as a key factor in the US’s efforts to swifting the supply chain away from China. Additionally, Vietnam now stands as the second-largest global repository of rare-earth metals, trailing only behind China, according to U.S. Geological Survey data.
In response to China’s prolonged dominance in the rare-earth market due to cost-effective production, the U.S. is actively working to revive its presence in this sector (notably, the U.S. had no rare-earth production as recently as 2017). In prompting efforts to resurrect domestic mines, the US established collaborative agreements with 13 countries, to coordinate financial and diplomatic support for minerals, with a commitment to assisting Vietnam in surveying its mineral deposits.
In the context of global hunger for critical minerals, Jose Fernandez also emphasized the importance of environmentally responsible mining that benefits communities and brings technological advancements. He sees Vietnam as a potential manufacturing hub, highlighting the country’s young workforce as an asset.