Despite ambitious plans to develop its semiconductor ecosystem, Vietnam faces persistent power supply issues that could impede industry growth and foreign investment.
According to The Investor, Vietnam's government has acknowledged that power supply to semiconductor companies is "sometimes insufficient," with these shortages emerging as a major obstacle to the industry's development. The power constraints have not only disrupted personnel training, research, and manufacturing. Most notably, in mid-2023, a power crisis in northern Vietnam impacted mobile phone production and reportedly contributed to Intel halting its expansion plans in the country.
While peak electricity demand approaches in May 2025, the Vietnamese government has urged companies like Foxconn to conserve energy. Although Prime Minister Pham Minh Chinh has reassured the public that such shortages will not recur, industry experts warn that power supply issues, alongside talent shortages and high capital costs, could deter semiconductor investments.
In response to these challenges, Vietnam plans to restart nuclear energy development, aiming for a net-zero target by 2050, having secured cooperation agreements with Russia to revive two nuclear plants in Ninh Thuan.
DIGITIMES Research analyst Chou Yen has emphasized that power supply and labor remain the two primary concerns for Taiwan-based companies when setting up facilities in Vietnam. In comparing the System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI) between Vietnam and India—another favored location for Taiwan-based enterprises in recent times—the data shows Vietnam demonstrating superior power grid reliability.
Based on data from 2020, Vietnam experienced an average of 356 minutes without power over the year, whereas India faced a significantly higher average of 6,369 minutes. Furthermore, power outages in Vietnam occurred an average of 3.12 times during 2020, compared to an average of 157 times in India. Notably, within Vietnam, the power grid in the southern region shows greater reliability than in the north, nearing the level of reliability found in Taiwan.
Vietnam's semiconductor strategy aligns with Malaysia's, focusing on backend packaging and testing. With 174 semiconductor-related projects totaling US$11.6 billion in investment, the country aims to attract foreign direct investment and train 50,000 professionals by 2030. However, bureaucratic inefficiencies remain a concern, leading to recent efforts to streamline administrative processes for improved efficiency.