Investment from Taiwan fuels Vietnam’s high-tech industry
More advanced manufacturing from Taiwan will migrate to Vietnam in the future, write Daphne Lee, head of commercial banking, HSBC Taiwan, and Ahmed Yeganeh, head of wholesale banking, HSBC Vietnam.
One of Taiwan’s most popular exports to ASEAN is bubble milk tea. The island’s signature beverage has become a staple of shopping malls and takeaway stands across ASEAN, with total annual sales estimated at $3.7 billion. Vietnam with its 100-million population contributed $362 million to this number, only behind Indonesia and Thailand.

Daphne Lee, head of commercial banking, HSBC Taiwan. Photo courtesy of HSBC.
But the sugary concoction of tea, milk and tapioca pearls is not Taiwan’s only success story in Southeast Asia.
Trade between ASEAN and Taiwan reached $117 billion in 2023, with ASEAN economies accounting for 17.6% of exports from Taiwan. The trade corridor has taken on new significance since the Covid-19 pandemic, led by the realignment of supply chains in the electronics sector. Exports from Taiwan to Thailand have almost doubled since 2019, while those to Singapore and Malaysia have each swelled by more than 60%.
Amongst, Vietnam emerges as the prime destination that attracts Taiwanese businesses. According to Vietnam’s Ministry of Planning and Investment, Taiwan in 2023 quadrupled its investment to Vietnam compared with 2022, reaching a staggering $2.2 billion. Up to now, Taiwan is the fourth largest investor into Vietnam, boasting nearly 3,200 projects and a total registered capital exceeding $39.5 billion. Additionally, Taiwan has become Vietnam’s fifth-largest trading partner with current annual bilateral trade turnover reaching $25 billion.

Ahmed Yeganeh, head of wholesale banking, HSBC Vietnam. Photo courtesy of HSBC.
In first six months of 2024, there were 39 new Taiwanese-invested projects, on electronics, garments and textiles and electrical equipment, in Vietnam with a total registered investment capital of $513.37 million, equivalent to 49% of Taiwan’s total FDI in the period.
As we look ahead, it is clear that Taiwan’s strengths in the technologies make it integral to the supply chains of the future. And the opportunity is reciprocal, with Taiwanese companies strengthen their trade links in ASEAN, while international tech firms increasingly see Taiwan as a compelling investment proposition to bring innovations to scale.
Taiwan is well known as a global leader in electronics and semiconductors, with more than 70% of the market share for high-end chips. Companies from Taiwan make more than 80% of the world’s PCs and 90% of its servers.
Over the sea, Vietnam owns the semiconductor industry which is anticipated to be valued at $20-30 billion by 2030, with the ambition to become the key player in the global semiconductor industry. The country started to realise that aspiration by issuing policies focusing on high-quality FDI attraction and training enhancement. Vietnam also owns abundant young, skillful labour force, strategic geography, growing consumption market, competitive operational cost, and above all, a wide range of FTAs with diverse countries and territories.
That’s when matchmaking works. In ASEAN, Vietnam has become the second-biggest recipient of overseas investment from Taiwan, after Singapore. The Binh Duong branch of the Council of Taiwanese Chambers of Commerce in Vietnam has more than 600 members, the most of any chamber of commerce for companies from Taiwan anywhere in the world. In the opposite direction, more than 250,000 Vietnamese live and work in Taiwan.
Recently, companies from Taiwan have been stepping up their investments in more advanced electronics. Investments like these help Vietnam upskill its workforce, rise up the manufacturing value chain and attract other suppliers.
Vietnam’s appeal
The 100-million-population country has stolen Taiwanese investors’ eyes thanks to its strong fundamentals and cultural similarity, especially in high-tech area.
Vietnam is now familiar with Taiwanese giant names in electronics such as Foxconn, Pegatron, Qisda, Compal, Quanta and Wistron. Or, the country recently has received $250 million from Tripod Technology into Ba Ria-Vung Tau province.

Quanta Computer Inc’s logo outside the company’s headquarters in New Taipei City’s Linkou district .Photo courtesy of Taipei Times.
With the pivotal shift from labour-intensive industries to skill/knowledge-intensive sectors, Vietnam’s government is offering preferential policies in high-tech industries, aiming to attract more quality investments, promisingly bringing more benefits to foreign investors including Taiwan.
The most complex manufacturing operations – such as those producing the most advanced semiconductors – are likely to remain in Taiwan for the foreseeable future, given the degree of specialisation, intellectual property, and capital expenditure required. But we can expect a growing cross-section of advanced manufacturing to migrate to ASEAN and Vietnam over the coming decades as demand ratchets higher and regional supply chains become more and more advanced.
Vietnam itself has witnessed the strong and broadening economic recovery, which pinned the GDP growth in Q2/2024 at 6.9%, accelerating the growth in first half of 2024 to 6.42%, the second highest within five years. This out-of-expectation result convinces that Vietnam can reach the year-end growth at 6.5%, likely becoming ASEAN’s fastest-growing economy. Those factors have increased Vietnam’s appeal in international investors’ eyes, including Taiwanese companies.
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