Vietnam - top target for CHIPS Act aid funds

According to the piece, the information was unveiled by a visiting US envoy. The US is targeting seven countries for part of its CHIPS and Science Act, which includes US$500 million for improving semiconductor training, cybersecurity, and business climates globally, said Jose Fernandez, US undersecretary of state for economic growth, energy and the environment. 

Fernandez told Nikkei Asia that the country should therefore take action before it is too late to attract investment in vital industries, like clean energy and minerals, which can then be used for electric vehicles and batteries.

Vietnamese officials have been pressing hard for the US to designate the nation as a market economy, a move that would bring with ittariff cuts. Along with that issue, Fernandez said that he discussed renewable energy with officials, saying that problems with permits may hold back as much as US$8 billion of US investment, including by chip companies that pledge to use only clean power.

The US will grant foreign aid under the CHIPS Act based on recommendations put forward by the Organisation for Economic Co-operation and Development which are due in February. The study includes asking companies what the country needs in order to develop the semiconductor industry, such as training, Fernandez said.

"We went through a list of countries that we felt had the potential to benefit from our support, and Vietnam was one of the first countries that we thought about," he said in an interview. 

Vietnam is a top exporter of electronics, clothes, and food, whilst it is a key node in US attempts to shift supply chains away from China. 

It ranks second globally for reserves of rare-earth metals, behind only China, US Geological Survey data indicated, although how much can be mined remains unclear. 

The US is resurrecting its own mines, has entered a deal to co-ordinate financial and diplomatic support on minerals with 13 countries, and has also offered to help the Vietnamese side to survey its deposits.

"There's a great hunger in the world for critical minerals," Fernandez said. The "competitive advantage" of the US and partners is to do mining "that benefits communities, that does not degrade the environment and that brings additional technology and investment."

When asked about US investment moving out of China, he said, "This is an opportunity. Vietnam has the potential to become an even greater manufacturing hub."

He added that the young Vietnamese workforce is an asset, saying he told students during his visit, "Take advantage of this, because it may not be here forever."

Since President Joe Biden upgraded bilateral ties during a visit to Vietnam back in September, 2023, the country has stepped up its campaign to be considered a market economy. "This is not a political decision, it's a quasi-judicial process that's governed by the laws,"Fernandez said.

After stops in Ho Chi Minh City and Hanoi, he headed to the Philippines on January 29, which will then be followed by a trip to the Republic of Korea.

Source:VOV