Amkor Technology's Vietnam semiconductor packaging factory to begin operations in October

The first Vietnam factory of U.S.-based Amkor Technology Inc., a global semiconductor product packaging and test services provider, is set to begin operations this October in Bac Ninh province.

Provincial authorities announced this during a working session last Sunday with Prime Minister Pham Minh Chinh that reviewed the northern province’s socioeconomic performance in the first half of the year and previewed tasks for the second half.

Bac Ninh Chairwoman Nguyen Huong Giang said that the opening of Amkor Technology's factory would provide fresh impetus for the province’s economic growth.

The factory will be among the biggest operated by Amkor globally, covering 1.9 million square feet (over 176,500 square meters). The Vietnamese plant's size will be only behind Amkor's South Korean factory that has an area of 4.4 million square feet. Other major production sites are in Japan (1.8 million square feet), Shanghai (1.4 million square feet), and the Philippines (1.3 million square feet).

The plant will deliver advanced system-in-package (SiP) modules and other packaging solutions, helping the firm with supply chain diversification.

Amkor Technology Inc. will invest about $1.6 billion until 2035 on building a state-of-the-art facility in Bac Ninh.

When Nguyen Anh Tuan, Secretary of the Bac Ninh Party Committee, visited the factory’s construction site at the Yen Phong II-C Industrial Park in May, Kim Sung Hun, CEO of Amkor Technology Vietnam, said work would be completed in September and train operations conducted the month after.

The Yen Phong II-C Industrial Park, invested in by Vietnam's leading producer of building materials Viglacera, has attracted investments with a total registered capital of nearly $2.18 billion and has an occupation rate of 77%.

PM visits Samsung factory

On Sunday, the Prime Minister also visited the factory of Samsung Electronics Vietnam in Bac Ninh, one of the tech giant's two plants in the province.

Samsung’s export revenues from Vietnam reached $65 billion in 2022, or 17% of Vietnam’s total. In 2023, given the global economic downturn, the export revenue is expected to decrease to $60 billion, said Samsung Vietnam CEO Choi Joo Ho.

Over the last 15 years, Samsung has developed six factories in Vietnam with a total registered capital of $20 billion, employing 100,000 people. Choi said Samsung was committed to making long-term and sustainable investments in Vietnam, now a production hub accounting for half of the company’s smartphones, he noted.

Prime Minister Chinh said that Vietnam keeps its commitments to investors and is committed to keep improving the nation’s investment environment, develop infrastructure, and cooperate with businesses in workforce training so as to facilitate foreign investors’ long-term and stable operations.

He said the government has asked the Ministry of Planning and Investment (MPI) to research and prepare plans to attract more investment and provide more support for investors in line with international practices and commitments.

In related news, the Vietnamese government will submit global minimum tax (GMT) resolutions to the National Assembly, the country's highest legislative body, for approval in October.

The Ministry of Finance has been ordered to draft a report on the GMT's implementation and the MPI has been asked to draft non-tax support policies for investors to offset losses derived from the new rule.

This tax, agreed to by the G7 countries in June 2021 to prevent tax avoidance by multinational corporations, is set to take effect on January 1, 2024 in many OECD countries. The GMT, under OECD Pillar Two, is a once-in-a-lifetime global tax reform that will apply to multinational companies with annual revenues of EUR750 million ($800 million) or more. Such companies will be subject to a minimum global tax rate of 15%.

Meanwhile, tax authorities have noted that about 335 direct investment projects worth over $100 million each, mostly in manufacturing and processing, are enjoying corporate income tax (CIT) rates of below 15%. Notable names are high-tech firms like Samsung, Intel, LG, Bosch, Sharp and Foxconn.

Bac Ninh’s gross regional domestic product (GRDP) dropped 12.59% year-on-year in the first half of this year, the worst performance in a decade, amidst challenges in the global economy, according to local data.

The province’s index of industrial production (IIP) recovered in July with a month-on-month growth of 23.84%. However, on a year-on-year basis, the IIP fell 3.19% in July, as demand remained weak in both domestic and overseas markets. In January-July, Bac Ninh’s IIP decreased 16.62% year-on-year.