2023-12-11 22:50:00
Nvidia Plans to Make Vietnam “Major Chip Manufacturing Center”
Nvidia, the chip giant, has expressed its intention to make Vietnam a “major chip manufacturing center,” according to the Vietnamese government. This move is seen as a strategic step to reduce its dependence on Taiwan and mitigate potential risks.
Reports from the Vietnamese government indicate that Nvidia’s CEO, Jensen Huang, expressed interest in investing in the country during a meeting with the Vietnamese prime minister. The government also noted that Nvidia has already invested approximately $250 million in the country. While the extent of the potential investment is not yet clear, Huang emphasized the positive relations between the U.S. and Vietnam as a sign for future cooperation.
The decision to expand manufacturing operations to Vietnam comes amid concerns about the vulnerability of Nvidia’s current production center in Taiwan, where it collaborates with chip manufacturer Taiwan Semiconductor. Additionally, broader considerations of national security have prompted Nvidia to diversify its manufacturing locations in order to spread risks and reassure investors.
Vietnam has announced its goal to train around 50,000 engineers, with a focus on semiconductor design, by the end of the decade. This aligns with Nvidia’s plans to invest in a strong talent pool in the country.
Nvidia is not the only chipmaker looking to diversify manufacturing locations. Recently, it was reported that the state of New York is joining Micron Technology and IBM to invest $10 billion in a semiconductor research facility aimed at manufacturing next-generation chips. Micron is also investing in a chip assembly plant in India, in addition to its current manufacturing operations in Japan and Taiwan.
Following the news of Nvidia’s expansion plans, its shares traded down 2%, largely influenced by concerns about the tensions between the U.S. and China. This decline marks a setback from the stock’s high of $500 at the end of November. Despite the drop, Nvidia continues to trade at a value of $1.1 trillion.
The decision to make Vietnam a key manufacturing center reflects the changing landscape of the semiconductor industry and the efforts of major players to address risks and bolster their global presence.
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