Semiconductor progress to hinge on incentives, Source: freepik.com

At last week’s 41st session, the National Assembly (NA) Standing Committee gave its opinion on the draft and featured new incentives for those involved in semiconductors. The draft stipulates that the industry will enjoy general incentives already available to digital tech firms.

Le Quang Huy, Chairman of the NA Committee on Science, Technology, and Environment, highlighted some new preferential policies for the semiconductor industry in the draft. Specifically, Article 44 stipulates that the actual cost for research and development (R&D) in the semiconductor industry is calculated at 150 per cent when determining taxable income for corporate income tax (CIT).

The article also stipulates that the state directly supports costs not exceeding 10 per cent of the total investment in building factories, technical infrastructure, and machinery and equipment from the budget for development expenditures.

Article 59 stipulates and supplements incentives and funding support into the Law on Investment for key digital technology products and R&D, as well as the design, manufacturing, packaging, and testing of semiconductor products.

Hoang Thanh Tung, Chairman of the NA Law Committee, agreed with these policies, and suggested that there should be provisions to amend relevant provisions of the laws on CIT, the state budget, sci-tech, and other relevant laws, to ensure consistency.

“Regulations like the 150 per cent when determining CIT are necessary, but currently different from the provisions in the actual CIT law,” Tung said.

Chairman of the NA Economic Committee Vu Hong Thanh said that the draft currently only encourages domestic enterprises to form joint ventures with foreign investors in R&D, design, manufacturing, and commercialisation of semiconductor-related products.

“I suggest the drafting agency add the reason why we do not encourage attracting foreign investment in this field. If we can attract more foreign investors not only in joint ventures and R&D, but also in investing in our semiconductor products, it will be useful for our economic development,” Thanh said.

NA Chairman Tran Thanh Man noted that Vietnam must see double-digit growth in 2026-2031 to become a developing country with modern industry and upper middle income by 2030, and a developed country with high income by 2045.

“AI, blockchain, and semiconductors must be strategic technologies for us, and Vietnam’s goal is to master them by 2030,” he said.

For non-traditional like Israel, Malaysia, Singapore, India, and elsewhere, the investment capital flow for semiconductor manufacturing will be about $72 billion by 2032, of which 55 per cent has plans and investment commitments.

The Law on Digital Technology Industry is expected to be approved by the NA at the ninth session in May.