Looking at the Vietnam chip supply chain while China reduces output, Lam Research

The prime minister of Vietnam met with Lam Research, a US company that makes semiconductor equipment, as the latter attempts to diversify its supply chain and warns of a potential blow to its China business from US export limits.

Reporters were informed by Lam Research that Karthik Rammohan, Group Vice President of Global Operations, visited Hanoi to assess prospects for supply chain diversification and to assist with their manufacturing activities in Asia. Pham Minh Chinh, the prime minister, hosted him. Vietnam is pleading with the business to put $1 billion into domestic manufacturing.

On Thursday, the government said on its website that Lam Research will collaborate with Seojin, a South Korean company that has factories in the Vietnamese provinces of Bac Ninh and Bac Giang, which are major hubs for the production of Samsung smartphones and semiconductors. Seojin, an Intel and Samsung supplier, declined to disclose its role.

In 2023, China accounted for about 26% of Lam Research's total revenue, a decrease from 31% in 2022. The California-based business claimed in a securities filing that export limitations imposed by the United States on goods bound for Chinese consumers "adversely" impacted revenues and may do so in the future to an even greater degree.

It said it had no present plans to expand, but it sources tin and tungsten from eight Vietnamese companies, including Masan, a conglomerate backed by Alibaba.

The communist nation is home to dozens of chip businesses, and in 2023, foreign producers ranging from Amkor to Hana Micron announced billion-dollar expansions. Months after welcoming Chinh to the United States, last year's Nvidia CEO Jensen Huang traveled to Vietnam to talk about investments.

Hanoi has been bragging to foreign investors about its intention to teach 50,000 semiconductor engineers, designers, and other staff members throughout the China-US tech war; in a recent government article, the number was raised to 100,000.