As Vietnam continues to thrive among Asia’s top destinations for foreign investment, Kenno remains committed to keeping its global audience informed about key developments through the 'Kenno Vietnam Pulse' series. In September 2024, Vietnam focused on quickly regaining economic momentum following the temporary disruptions caused by Typhoon Yagi. The high-tech sectors, including semiconductors and artificial intelligence (AI), along with national infrastructure development, continued to see positive progress.
In the financial market, the Vietnamese dong (VND) continued its recovery, in line with other emerging market currencies. Its value increased by another 1% against the USD in September, contributing to a 3% gain over the July-September period. The VND ended the month with only a 1.3% year-to-date (YTD) loss against the USD. With less pressure from the USD, we believe the State Bank of Vietnam (SBV) will have more flexibility to support the economy, especially in the aftermath of Typhoon Yagi. The SBV reduced the Open Market Operations (OMO) rate from 4.25% to 4% per year on September 16th. This was the second policy rate cut in 2024; the first occurred on August 5th, when the SBV lowered the OMO rate from 4.5% to 4.25% per year.
In the second phase (2030-2040), Vietnam aims to combine foreign investments with domestic resources to form at least 200 design businesses, 15 packaging and testing factories, and two chip manufacturing plants. By this time, the sector is expected to surpass $50 billion in annual revenue, with added value reaching 15-20%.
In the third phase (2040-2050), Vietnam aspires to become a significant global player in semiconductors and electronics, with at least 300 design businesses, 20 packaging and testing factories, and three chip manufacturing plants. Eventually, the sector is expected to exceed $100 billion in annual revenue, with added value reaching 20-25%.
This comprehensive strategy aims to establish an independent semiconductor ecosystem in Vietnam, positioning the country to take a more prominent role in certain stages of the global supply chain. Foreign investment in the industry, especially over the next 15 years, will be a selective and key driving factor in enabling Vietnam to achieve this goal.
According to Mr. Lam, Vietnam is transitioning towards a digital and sustainable economy, hosting many international high-tech enterprises such as Samsung, Amkor, Hana Micron, Intel, Foxconn, and LG. Strengthening the Vietnam-US partnership in the semiconductor and AI sectors is seen as a strategic and highly beneficial move, opening up numerous opportunities including the growth of supporting industries.
This deeper level of collaboration is also supported by Vietnam’s growing focus on high-tech industries and workforce development. The recent establishment of a national steering committee for the semiconductor industry and the implementation of an AI development strategy since 2021 demonstrate the country's commitment. By 2030, Vietnam aims to train 50,000 engineers, becoming a global hub for high-tech human resources.
In terms of capacity, Long Thanh Airport’s Phase 1 is designed to serve 25 million passengers annually, increasing to 50 million in Phase 2, and ultimately 100 million in Phase 3. Currently, Vietnam’s other major international airports, including Noi Bai in Hanoi and Tan Son Nhat in Ho Chi Minh City, can respectively accommodate 30 million and 25 million passengers per year.
Since construction began, the project has progressed smoothly Despite a challenging start during the COVID-19 pandemic. The local authority, Dong Nai Province, has now secured 99% of required land area and while arranging for the resettlement of displaced residents.
The Long Thanh International Airport is one of Vietnam’s key priorities for future-proofing its transport infrastructure, designed to meet global standards. In addition to promoting tourism, it will also play a significant role in attracting FDI and boosting air cargo exports on a national scale.
And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates.
Should you need a closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.
Laura Ranin
Disclaimer:
This document is prepared by Kenno Asset Management Pte. Ltd. ("Kenno"), the investment advisor for the Asia Top Picks Fund which is open only to professional investors. This marketing communication does not constitute investment advice. Please refer to Kenno’s official fund documents before making any final investment decision.
The information provided in this document is accurate as of the time of writing. Kenno does not guarantee the ongoing accuracy or completeness of this information and is not responsible for updates or changes after publication.