Vietnam industrial property to benefit from semiconductor drive: Savills

The industrial real estate segment in Vietnam is anticipated to benefit from the government’s strategy to develop the semiconductor industry that has attracted major global players, property service firm Savills has said.

Vietnam has several selling points that make it an attractive destination for semiconductor investors, said Thomas Rooney, senior manager of industrial services Hanoi, Savills Vietnam.

They include a strategic geographic location, large rare earth reserves, stable politics, and appealing government incentives.

The semiconductor industry in Vietnam is forecast to have a value exceeding $6.16 billion by the end of this year, Savills cited research as saying.

Meanwhile, the global semiconductor industry may be valued at more than $600 billion next year, up 14% from 2023, according to the U.S. Semiconductor Industry Association (SIA).

Rising demand from semiconductor fabrication and testing and packaging companies is leading to requests for warehouses and industrial parks that can meet the tenants’ needs for infrastructure and services, said Rooney.

Samsung, Qualcomm, Infineon, and Amkor have unveiled billion-USD projects to invest in semiconductors in Vietnam. The Netherlands’s BE Semiconductor Industries N.V has recently secured an investment registration certificate to invest $4.9 million in Saigon Hi-Tech Park in Ho Chi Minh City in a first phase to rent facilities.

Vietnam’s northern economic region is expected to remain as a hotspot for industrial real estate amidst a strong semiconductor investment wave, given foreign investors’ appetite to pour money in high-tech industries there.

However, to accommodate those sophisticated investments, localities and developers need to complete their policies and prepare infrastructure and manpower.

Among the most critical issues, Vietnam should accelerate large-scale energy projects, particularly transmission lines during the peak season in summer, Rooney suggested.

Despite having a workforce of 52.4 million laborers aged 15 and above, the country still lacks skilled engineers to meet the demand of the semiconductor industry. Resolving the manpower problem will elevate Vietnam’s status and help attract more high-tech companies to the country.

The Vietnamese government has tasked the Ministry of Planning and Investment to lead a multi-agency task force to carry out a plan to train up to 50,000 engineers for this industry by 2030.

The government and businesses should work closely to tap existing potential, improve the investment climate, raise the quality of infrastructure, and prepare a skill workforce to facilitate the sustainable development of the semiconductor industry as well as the industrial real estate sector in the country, Rooney added.