Sufficient, reliable power supply key for FDI inflow into Vietnam data centers

By Lien Thuong, Hai Yen
Mon, September 2, 2024 | 7:44 pm GMT+7

Sufficient and reliable power supply will be a crucial factor in attracting foreign direct investment (FDI) for developing data centers as Vietnam looks to tap the growing global demand for such facilities, experts say.

These days, the Saigon High-Tech Park (SHTP) in Ho Chi Minh City has caught the eye of many tech players looking to develop data centers.

For instance, in May-June 2024, South Korea’s Hyosung Group informed the HCMC People’s Committee that it was interested in investing in a three-hectare data center of tier-3 standards with a capacity of 1,500-4,000 racks.

 Inside a data center in Ho Chi Minh City, southern Vietnam. Photo courtesy of Saigon Times.

Inside a data center in Ho Chi Minh City, southern Vietnam. Photo courtesy of Saigon Times.

Several other data center projects have already got the green light from Vietnam, including Hong Kong-headquartered Gaw Capital’s 20MW facility at SHTP, Singapore-based Worldwide DC Solution’s 30MW data center in Thu Duc city, and a project jointly developed by Japanese telecom giant NTT and South Korea’s DQ Tek.

China’s Alibaba has also announced a plan to build a data center in Vietnam. Hathor DC Vietnam Holdings Pte. Ltd – a subsidiary of Singapore’s SEvolution Data Centers Group, has asked for approval from the HCMC government to become a strategic investor in the SHTP Data Center project.

Alongside the race for data center development, an equally compelling competition is unfolding in the semiconductor industry.

In early July, a business mission from U.S. chip giant Nvidia visited HCMC to explore investment opportunities. Nvidia officials said they aimed to establish a research, development and training center focused on artificial intelligence; install a supercomputer system; and move some of its GPU production for supercomputers to Vietnam.

Another U.S. tech giant, Marvell Group, is also accelerating the expansion of its chip design centers in Vietnam. In mid-May 2024, Marvell launched a new chip design center in the central city of Danang, complementing two existing centers in HCMC.

Other key factors

On November 24, 2023, the National Assembly, Vietnam’s parliament, passed the Law on Telecommunications. Effective July 1, 2024, the new law is considered another key factor in attracting foreign investment for developing and operating data centers in Vietnam.

David Jackson, CEO of Avison Young Vietnam, told The Investor that besides the Telecommunications Law, there was a growing effort to spare industrial land for high-tech industries.

With an increasingly open and competitive market, Vietnam was poised to attract more investors into the high-tech sector, he added.

Cleared land (with all site clearance formalities completed) and reliable energy infrastructure were crucial factors for attracting foreign investment, Jackson said, noting that data centers required large and stable power supply.

He recommended that Vietnam in general and HCMC in particular continue to refine legal policies to guide the data center market towards sustainable and green development.

Celina Chua, director of Data Center Client Solutions (APAC) at JLL, a Singapore-based real estate investment advisory firm, remarked that Vietnam’s Telecommunications Law permits 100% foreign investment in data center services. However, market access restrictions will apply if the data center service provider also offers network connectivity services, she said.

Chua also said that Vietnam ranked high among countries that investors and operators were planning market entry strategies for. The country was becoming a key destination in the Asian data center market thanks to its strategic geographical location, dynamic economic policies, tech-savvy young population, and increasing demand for data localization, she added.

She also said that construction and operational costs gave Vietnam a relative advantage, with building data centers in the country costing $6 million to $13 million per megawatt.

Furthermore, under its latest Power Development Plan (PDP VIII), Vietnam aims to raise total power generation capacity from around 80 GW to 155 GW by diversifying the energy structure, reducing dependence on coal power and shifting to more sustainable energy sources.

Chua said that this transition will be crucial for ensuring stable and reliable energy supply to meet increasing demands of the rapidly expanding, energy-intensive data center sector in Vietnam.

Vietnam now has 33 data centers, mostly in Hanoi and HCMC, far below mature markets like mainland China, Hong Kong, and Singapore.

Comments (0)
  • Read More
Hanoi terminates Vinaxuki auto plant project, repurposes land for commercial complex

Hanoi terminates Vinaxuki auto plant project, repurposes land for commercial complex

A long-stalled automotive manufacturing project by Xuan Kien Auto JSC (Vinaxuki) has been officially terminated by Hanoi authorities, and the reclaimed land in Phuc Thinh commune will be repurposed for a new commercial and service complex.

Industries - Tue, September 16, 2025 | 2:44 pm GMT+7

Central Vietnam province reviews investment proposal for thermal power project after Thai EGATi pullout

Central Vietnam province reviews investment proposal for thermal power project after Thai EGATi pullout

Authorities in the central province of Quang Tri are evaluating a proposal from Power Generation JSC 1 (EVNGENCO 1), a subsidiary of state utility Vietnam Electricity (EVN), to take over the Quang Tri thermal power plant project, following the withdrawal of Thai investor EGATi.

Energy - Tue, September 16, 2025 | 1:44 pm GMT+7

Amata to sell stakes worth $46 mln in Vietnam units to Novaland-tied buyers

Amata to sell stakes worth $46 mln in Vietnam units to Novaland-tied buyers

Amata VN, the Vietnam arm of Thailand’s leading industrial park developer Amata, has approved a plan for its subsidiary Amata City Long Thanh Urban JSC (ACLT) to sell its remaining 51% stakes in two entities to local developer Novaland-linked buyers.

Real Estate - Tue, September 16, 2025 | 12:19 pm GMT+7

Vietnam already meets FTSE's criteria for stock market status upgrade: Finance Minister

Vietnam already meets FTSE's criteria for stock market status upgrade: Finance Minister

Vietnam has fulfilled the criteria for a stock market status upgrade by FTSE Russell through reforms aimed at facilitating foreign investment inflows into its market, said Minister of Finance Nguyen Van Thang.

Economy - Tue, September 16, 2025 | 9:36 am GMT+7

Banks should be allowed to distribute, invest in mutual fund certificates: Vietnam's finance ministry

Banks should be allowed to distribute, invest in mutual fund certificates: Vietnam's finance ministry

The Ministry of Finance is proposing a key reform that would allow commercial banks to invest in and distribute mutual fund certificates, as part of a broader plan to restructure the investor base and foster the development of Vietnam’s fund management industry.

Finance - Tue, September 16, 2025 | 8:00 am GMT+7

E-commerce boom a major driver of Vietnam's packaging paper industry growth

E-commerce boom a major driver of Vietnam's packaging paper industry growth

Vietnam's paper packaging industry is entering a period of strong growth, with an average annual growth rate forecasted at 10% until 2030.

Companies - Mon, September 15, 2025 | 10:20 pm GMT+7

Vietnam needs support from UK in developing international financial center: Deputy PM

Vietnam needs support from UK in developing international financial center: Deputy PM

Permanent Deputy Prime Minister Nguyen Hoa Binh has called on the UK and the City of London to continue supporting and accompanying Vietnam in promoting and introducing its international financial center (IFC).

Finance - Mon, September 15, 2025 | 10:12 pm GMT+7

Vietnam enforces 8% capital adequacy ratio for banks from Sept 15

Vietnam enforces 8% capital adequacy ratio for banks from Sept 15

Commercial banks and foreign bank branches in Vietnam must maintain a minimum capital adequacy ratio (CAR) of 8%, including at least 4.5% in Tier 1 core capital and 6% in Tier 1 capital, starting from September 15.

Banking - Mon, September 15, 2025 | 10:04 pm GMT+7

Tool for wood traceability management debuts in Vietnam

Tool for wood traceability management debuts in Vietnam

The Vn-WoodID application has been officially launched in Vietnam, becoming a key tool contributing to wood traceability.

Companies - Mon, September 15, 2025 | 10:00 pm GMT+7

Sun Group, US Embassy foster aviation-hospitality cooperation

Sun Group, US Embassy foster aviation-hospitality cooperation

Sun Group, in collaboration with the US Embassy in Vietnam, hosted the US – Vietnam Aviation Partnership Roundtable on September 12, bringing together 15 leading American corporations in aviation, technology, and financial services, opening up opportunities to position Phu Quoc as a new aviation and tourism hub in the region.

Companies - Mon, September 15, 2025 | 9:54 pm GMT+7

Vietnam tops Thai giant SCG’s overseas markets with 9% revenue contribution in H1

Vietnam tops Thai giant SCG’s overseas markets with 9% revenue contribution in H1

Vietnam remained the largest overseas market for Thailand’s Siam Cement Group (SCG) in the first half of 2025, contributing 9% of consolidated sales.

Companies - Mon, September 15, 2025 | 8:10 pm GMT+7

Central Vietnam to have new airport Mang Den

Central Vietnam to have new airport Mang Den

Procedures to adjust Vietnam's airport system planning, including the addition of Mang Den Airport in central Vietnam, are being proceeded, according to the Ministry of Construction.

Infrastructure - Mon, September 15, 2025 | 5:16 pm GMT+7

Vietnam's government seeks to position country as 'regulated hub for digital assets in Asia': Dragon Capital

Vietnam's government seeks to position country as 'regulated hub for digital assets in Asia': Dragon Capital

The Vietnamese Government has advanced the regulation of digital assets, with a resolution launching a five-year pilot framework for issuance and trading. This framework signals the Government’s intent to position the country as a regulated hub for digital assets in Asia, which could attract new capital inflows, write Dragon Capital analysts.

Economy - Mon, September 15, 2025 | 2:20 pm GMT+7

Agribank introduces sizable $4.17 bln preferential credit package

Agribank introduces sizable $4.17 bln preferential credit package

Right from the beginning of 2025, Agribank launched a substantial preferential credit package worth VND110 trillion ($4.17 billion) to support individual customers.

Companies - Mon, September 15, 2025 | 1:32 pm GMT+7

'Precious space' in Vietnam's monetary policy

'Precious space' in Vietnam's monetary policy

The Federal Reserve's continued cuts in 2025, with the most recent in September, are considered a valuable policy "space" for the State Bank of Vietnam (SBV) to maintain low interest rates to support growth without having to worry too much about exchange rates.

Economy - Mon, September 15, 2025 | 10:15 am GMT+7

Vietnam’s central bank sells $1.5 bln to stabilize currency: broker MBS

Vietnam’s central bank sells $1.5 bln to stabilize currency: broker MBS

The State Bank of Vietnam (SBV) intervened in the foreign exchange market by selling approximately $1.5 billion via 180-day cancelable forward contracts from August 25-26, in an effort to ease pressure on the Vietnamese dong, according to a recent report by MB Securities (MBS).

Banking - Mon, September 15, 2025 | 8:04 am GMT+7