Vietnam's inaugural chip factory faces delays; ASML deal stalled

Vietnam's ambitious plan to build its first semiconductor fabrication plant appears to be falling behind schedule, with industry sources suggesting the facility will not be ready by the initially projected 2027 deadline. The delay stems partly from stalled negotiations with ASML, the Dutch chipmaking equipment manufacturer whose machinery is essential for advanced semiconductor production.

Vietnamese authorities had allocated approximately US$1.3 billion (S$1.66 billion) for the construction and initial operation of the facility, marking a significant investment in the country's efforts to develop domestic semiconductor capabilities. The plant was envisioned as a cornerstone of Vietnam's strategy to reduce reliance on imported chips and strengthen its position in the global electronics supply chain.

The failure to secure an agreement with ASML represents a critical bottleneck, as the company's advanced lithography equipment is considered indispensable for modern chip fabrication. Without access to such technology, Vietnam would struggle to produce competitive semiconductors at the scale and quality required for international markets.

The delay underscores the technical and commercial complexities involved in establishing semiconductor manufacturing in Southeast Asia. Industry analysts note that chip plant projects typically face extended timelines and cost overruns, particularly when developing countries attempt to enter the sector without established expertise or supply chain infrastructure.