Vietnam: Import surge points to tech investment cycle

研报英文原文证据摘录

Vietnam: Import surge points to tech investment cycle

the

Middle East.

Connecting the dots

The sharp increase in Vietnam’s semiconductor imports likely reflects a broader domestic

investment cycle in advanced infrastructure, amplified by global tech inflation (Figure 8).

Recent policy changes, including the 2024 Telecommunications Law allowing 100% foreign

ownership of data centers, in addition to new tax incentives and other regulatory reforms, have

likely encouraged investment. Several hyperscale projects are moving ahead, led by domestic

and international investors. Several large investments in the semiconductor sector are also

underway, according to media reports, including a US$1.5 billion investment by Samsung (link),

Amkor's plant expansion that would lift total registered capital to US$1.6 billion (link), Intel’s

US$2.6 billion investment (link), and LG Innotek’s US$1bn investment (link) alongside an

investment by Vietnam’s Viettel Group (link). Part of the increase in imports may also reflect

inventory accumulation and front-loading ahead of continued strong demand for hardware,

according to government officials (link).

The outlook for the current account and the VND

The unprecedented surge in electronics imports and limited visibility on the timeline of

ongoing investment projects raise uncertainty around the outlook for Vietnam’s current

account balance. We continue to assume that the surge is temporary and will gradually fade,

allowing strong export momentum and lower oil prices to return the trade balance to surplus later

this year. Taking into account the gap between the trade balance based on monthly customs data

and the balance-of-payments (BoP) goods balance, which typically reflects methodological