Industrial property to benefit from chip frenzy

The boom of the semiconductor sector is said to have direct impacts on the industrial realty sector as demand for factories has been on the rise, according to experts.

Vietnam is already home to notable semiconductor players, including Samsung, Qualcomm, Infineon, and Amkor, which has supported the construction and expansion of manufacturing and assembly operations worth billions of US dollars. By the end of 2024, the country’s semiconductor industry is forecast to surpass 6.16 billion USD, establishing itself as a key production hub for global semiconductor companies.

The industrial realty sector is expected to benefit from the semiconductor boom. (Photo: vneconomy.vn)

The industrial realty sector is expected to benefit from the semiconductor boom. (Photo: vneconomy.vn)

Several semiconductor firms from the Netherlands have also invested in Vietnam, with Be Semiconductor Industries N.V getting a licence to land over 115 billion VND (4.9 million USD) in Ho Chi Minh City for warehouse rental and production.

Most recently, Apple Inc supplier Foxconn has announced the establishment of a 9.4 trillion VND (383.3 million USD at current rate) factory to produce printed circuit boards at Nam Son – Hap Linh industrial park in Bac Ninh province.

Director of the Frasers Property Vietnam’s North Industrial & Residential Truong An Duong said that there will be a surge in the demand for manufacturing facilities, R&D centres and even exhibition centres at industrial parks, while the development of such new area as e-commerce will require changes in the planning for industrial areas.

Since Vietnam has been a hotspot for semiconductor investments, industrial realty developers are preparing to embrace the wave, with Frasers Property Vietnam studying the establishment of R&D centres, and arranging land fund to serve the industry in the next five to ten years.

According to Senior Manager of Industrial Services at Savills Hanoi Thomas Rooney, the investment demand for semiconductor manufacturing and assembly has driven an increase in the search for industrial land and facilities that meet the industry's infrastructure and service requirements.

Basic requirements include stable electricity supply, high-speed internet, and effective water treatment systems, thereby necessitating improved facility quality and systems by investors in the country, he added.

He held that semiconductor investment will boost the growth of the industrial real estate in the northern region, which is home to enterprises operating in high-value industries including computers, electronics and electrical products.

With a view to attracting capital into the semiconductor industry and industrial real estate, localities and enterprises must improve policy frameworks, infrastructure and workforces to meet the stringent requirements of this specialised industry, he said, highlighting the country should accelerate large-scale energy infrastructure projects as it is a power-hungry sector.

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