Vietnam is unlikely to meet its 2027 target for a trial production run at its first semiconductor plant, with a deal to buy chipmaking equipment from Dutch firm ASML yet to be reached, people familiar with the project have told Reuters. The site on the outskirts of Hanoi remains covered in wild vegetation, and satellite images from January and October confirm no buildings have been constructed.

The government-mandated project, led by military-run telecoms and defence group Viettel, broke ground in January with the aim of being fully operational by 2030 and supplying chips to the aerospace, telecom and car industries. A person with direct knowledge said the 2027 target would probably be missed because of Viettel's lack of experience building chip factories and administrative hurdles in securing government funding.

Viettel insists the project is on track

Viettel told Reuters the project was progressing in line with its established plan and schedule, with work carried out in phases. ASML declined to comment, and Vietnam's finance ministry did not respond to requests for comment. Talks with ASML are said to have been under way for months.

The plant is part of the ruling Communist Party's plan to move Vietnam up the semiconductor value chain, as it targets high-income status by 2045 and growth of at least 10% a year through 2030. The delay underlines how hard it is for newcomers to break into an industry dominated by a handful of equipment suppliers and experienced builders.