Danang gets parliamentary boost for semiconductor chip, AI development

A recent parliamentary resolution has outlined robust financial incentives for five priority sectors in the central Vietnamese city of Danang, including startups, semiconductor chips and artificial intelligence (AI).

Included in the five sectors prioritized for attracting strategic investors under Resolution 136/2024/QH15 is the construction of innovative centers, data centers, R&D centers, research and technology transfer in the fields of information technology and AI with an investment value of at least VND2 trillion ($78.9 million).

Then there are projects in semiconductor chip, integrated circuits (ICs), component manufacturing, pin electronics (PE), new-tech batteries, new materials, military technologies with an investment value of at least VND4 trillion ($157.8 million).

The three remaining sectors are infrastructure development of the Danang free trade zone; logistics centers related to Lien Chieu seaport with an investment of around VND3 trillion ($118.35 million); inland waterway tourism projects worth around VND8 trillion; and Lien Chieu port wharves of around VND45 trillion.

The resolution, focusing on organizing the urban administration and piloting of special policies for Danang’s development, also sets out incentives for strategic investors.

Incentives for strategic investors include deductions of R&D costs when calculating taxable income; clearance of customs procedures and fast-tracking of tax procedures for imported and exported goods; and one-time land rent option for investors in AI, semiconductor chips, semiconductor ICs, IT, innovation, and R&D.

In addition, investors of semiconductor chips, AI, and innovative startups can enjoy corporate income tax exemption for five years since the date of having taxable incomes; and five-year tax exemption on earnings from share sales of and capital contributions to non-public innovative startups, semiconductor chip and AI companies operating in the city.

Notably, the resolution grants a five-year personal income tax exemption for specialists, scientists, talents and individuals in the fields of innovative startup; chip design, manufacturing, packaging & testing, and AI.

Innovative startups are entitled to receive financial support from the city budget for several activities like expert hiring, incubation, R&D, and production of prototypes.

The resolution will take effect on January 1, 2025.

Danang is home to a large number of semiconductor projects of United States Enterprise and Synopsys. Last November, the city’s leaders invited a wide range of U.S. semiconductor and AI companies like Qorvo, Marvell, Nvidia, and Intel to invest in the locality.

The city houses a software park that was inaugurated in 2010 and is striving to put a second one into operation.

To lure semiconductor and AI investors, the city established the Danang Semiconductor and AI Center, called DSAC, in January this year.