Samsung to invest $1.5 bn in Vietnam semiconductor plant as global supply chains shift from China: Report – Firstpost

South Korean tech giant Samsung Electronics is set to invest $1.5 billion in a semiconductor testing plant in Vietnam, Reuters reported, as it simultaneously faces growing labour pressures at home after striking a landmark wage deal with its union that could reshape corporate profit-sharing norms across South Korea.

According to the report, the Vietnam facility will be built in Thai Nguyen province, around 60 kilometres north of Hanoi, and is expected to begin operations in November 2027.

It marks Samsung’s first semiconductor testing plant in the country and forms part of a broader push to diversify supply chains away from China amid geopolitical tensions and AI-driven demand spikes.

AI boom drives chip expansion push

The investment comes as the global semiconductor industry grapples with surging demand for memory chips fuelled by artificial intelligence infrastructure.

Rapid expansion of AI data centres has significantly increased demand for DRAM and NAND memory chips used in servers, smartphones, laptops and automotive systems. As chipmakers prioritise advanced AI memory products, supply of “legacy” chips has tightened globally.

The Vietnam plant will focus on testing these mature memory chips rather than producing cutting-edge semiconductors. Testing is the final stage in chip production, where semiconductors are checked for defects before shipment.

The facility is expected to have annual capacity to process more than 153 billion gigabits of DRAM and 255 billion gigabits of NAND memory chips, according to the proposal cited in the report.

Vietnam’s growing semiconductor role

Vietnam has steadily emerged as a major hub in the semiconductor back-end supply chain, particularly in assembly, packaging and testing operations.

The country already hosts facilities operated by global chip firms including Intel, Amkor Technology and Hana Micron.

Samsung is Vietnam’s largest foreign investor, with more than $23 billion committed over decades across electronics manufacturing operations. The new plant will sit adjacent to its large smartphone and tablet production complex, further integrating its supply chain.

More than 200 Samsung engineers are already working at the site, with construction activities underway even as some regulatory approvals remain pending, according to people familiar with the matter cited in the report.

Labour tensions in South Korea overshadow expansion

While Samsung expands abroad, it is simultaneously navigating a major shift in labour relations at home.

The company recently reached a government-mediated agreement with its union covering memory chip workers, averting a potential large-scale strike involving tens of thousands of employees.

Unionised workers approved the deal, which is being seen as a landmark moment in South Korea’s corporate labour landscape.

Under the agreement, Samsung will allocate 10.5 per cent of semiconductor operating profit to special bonuses for chip workers — one of the first formal arrangements in the country linking compensation directly to operating profit.

In some cases, memory chip workers could receive total bonuses of up to $416,000, according to reports.

The deal also removes a previous cap limiting performance-linked bonuses to 50 per cent of a worker’s salary and extends the earnings framework across a 10-year period.

Strategic balancing act for Samsung

Against this backdrop, Samsung’s Vietnam investment reflects a dual strategy: strengthening its position in the global semiconductor supply chain while managing rising labour expectations at home.

The company is also preparing a $3 billion fund aimed at supporting suppliers, ecosystem development and talent initiatives in South Korea — a move seen as an attempt to ease stakeholder pressure following the union deal.

The Vietnam plant itself is expected to play a key role in stabilising global memory chip supply chains, especially as AI demand continues to distort production priorities across the industry.

The proposal also suggests Samsung may reinvest profits into a second facility worth up to $2.5 billion, signalling long-term confidence in Vietnam as a critical node in its global manufacturing network.

With inputs from agencies.