US–Vietnam Digital Trade: Manufacturing to Chips

Vietnam’s role in the global economy is moving from factory floor to engineering base, semiconductor partner and AI services market.

The US is now Vietnam’s largest export market, taking more than 30% of all Vietnamese exports — and the relationship is no longer just about T-shirts and electronics assembly.

Vietnam shipped roughly $136.6 billion to the US in 2024, accounting for around 26% of Vietnamese GDP, according to Vietnam’s Ministry of Finance. The semiconductor market alone reached $10.16 billion in 2025 and is projected to hit $16.51 billion by 2030 at a 10.23% CAGR, per Mordor Intelligence. Intel runs one of its largest global assembly and test facilities outside Ho Chi Minh City. Amkor invested over $1.07 billion in its Bac Ninh packaging plant in 2024. Qualcomm has launched its third-largest AI R&D centre globally in Vietnam. NVIDIA has signed agreements with the Vietnamese government to expand AI and semiconductor R&D.

This is the part of the US–Vietnam story that doesn’t fit the manufacturing narrative anymore.

The April 2025 imposition of a 46% reciprocal tariff on Vietnamese imports, later renegotiated, made one thing clear: the digital and semiconductor layer of this relationship is now strategically valuable enough that both governments are willing to absorb significant short-term pain to protect it.

Why Vietnam matters to US semiconductor strategy

Vietnam currently accounts for around 1% of global semiconductor packaging and testing capacity. That number is projected to rise to 8–9% by 2030, according to SEMI’s 2025 outlook.

The country has positioned this growth deliberately. Vietnam’s National Semiconductor Strategy (2024–2050), backed by the June 2025 Law on Digital Technology Industry, offers four years of full corporate income tax exemption followed by a 50% reduction for nine years — among the most aggressive incentive packages in Asia. Da Nang offers super-deductions of up to 150% for R&D under Resolution No. 136/2024/QH15. The country aims to train 50,000 semiconductor engineers by 2030.

For US firms diversifying away from China and Taiwan, Vietnam offers something India cannot yet match at scale: an existing electronics manufacturing base that already handles the assembly step. Samsung, Intel, Foxconn, Pegatron, BOE Technology and others have built more than $72.6 billion in annual electronics exports out of Vietnam, equivalent to over 30% of total Vietnamese shipments in 2024.

US semiconductor capital lands on top of this base, not into a greenfield.

The AI services and software layer

The same logic applies to software. Vietnam’s tech workforce, anchored by FPT, VNG, MoMo, Tiki and a long tail of services firms, has become a credible China+1 alternative for US enterprise software companies that want lower-cost engineering capacity outside India.

Three forces make this work: a young population (median age around 33), strong English penetration in Tier-1 cities, and government policy that treats digital industries as strategic. Vietnam’s digital economy was projected to reach $43 billion in GMV in 2025 according to Bain & Company analysis, growing at 13–20% CAGR.

For US AI companies specifically, Vietnam plays two roles. It’s a services market — adoption of US cloud and AI platforms is accelerating fast, with multinational subsidiaries pulling Vietnamese teams onto AWS, Azure and Google Cloud. And it’s a delivery base — outsourced engineering and AI ops work, particularly for US-headquartered SaaS companies, increasingly routes through Hanoi, Ho Chi Minh City and Da Nang.

What this looks like commercially

Texas and California consistently lead US exports to Vietnam, each contributing $1.6–2.3 billion annually in machinery, tech goods and agricultural products. On the inbound side, Vietnam’s semiconductor chip exports to the US reached $562.5 million in 2023, up 74.9% on the prior year per US Census Bureau data — small in absolute terms, but compounding fast.

The strategic frame that’s emerging: Vietnam handles the lower and middle steps of the chip value chain (assembly, test, packaging, increasingly design), the US provides demand, capital, IP and frontier tools. India handles the talent-heavy software and GCC layer. China continues to produce the consumer electronics that China+1 strategies are designed around. Vietnam sits in the gap.

That positioning is fragile. The 46% tariff episode in April 2025 showed how quickly US trade policy can rearrange the maths. Vietnam’s response — accelerating diversification into Asia, Europe and the Middle East — is rational, but it doesn’t change the underlying gravity. The US remains Vietnam’s biggest export market, and frontier US technology companies remain Vietnam’s most important strategic partners on the digital side.

Where this goes next

The next phase of US–Vietnam digital ties is likely to be defined by three things.

Semiconductor capacity scaling beyond assembly. Vietnam’s National Strategy explicitly targets at least 100 chip design firms and one small-scale fabrication facility by 2030. This will require continued US technology transfer and R&D partnerships, particularly through Qualcomm, NVIDIA and Intel.

AI services moving from cost play to capability play. The same shift that happened in India over the past decade — from cheap labour to GCC-led capability — is starting to happen in Vietnam, more compressed.

A more formal trade architecture. The US–Vietnam Reciprocal, Fair, and Balanced Trade Agreement was in its fifth round of negotiations in November 2025. Whatever it lands on, it will likely codify some form of preferential treatment for the digital, services and semiconductor parts of the relationship.

Vietnam isn’t going to be India. The talent base isn’t deep enough, the GCC story is much smaller, and the regulatory frame is more cautious. But it doesn’t need to be India to matter. As a complementary partner — sitting between China’s production base and India’s talent base — Vietnam is becoming structurally important to US technology strategy in Asia.

That structural position is what the manufacturing-shift narrative misses.

This is part of a Digital in Asia series mapping the digital relationships shaping Asia’s next decade. Other pieces cover US–India: Strategic Tech Defining the Next Decade, US–Singapore: America’s SEA Digital Gateway, Japan–Vietnam: Engineering Partnership Up the Stack and others.

Related DIA coverage: Vietnam’s chip strategy, Southeast Asia’s data centre build-out, How AI Is Being Adopted Across Asia.