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The US and Vietnam have agreed to a series of lucrative business deals and partnerships involving major companies such as Boeing, Microsoft, and Nvidia. This development comes as the two former adversaries strengthen their ties in response to China’s growing influence. The upgrade in their relationship, commemorated during US president Joe Biden’s visit to Hanoi, focuses on areas like cloud computing, semiconductors, and artificial intelligence.
Biden, during a joint press conference with Nguyen Phu Trong, general secretary of Vietnam’s Communist party, stated, “We’re deepening our co-operation on critical and emerging technologies, particularly around building a more resilient semiconductor supply chain.” He also emphasized the expansion of economic partnerships and increased trade and investment between the nations.
The Vietnam-US Innovation and Investment Summit, attended by senior executives from companies like Google, Intel, Amkor, Marvell, GlobalFoundries, and Boeing, also took place during Biden’s visit. Vietnamese companies such as VinFast, the electric vehicle maker, participated in the summit as well. The agreements announced at the summit are expected to unleash a wave of investment deals between Vietnam and the US, following the signing of a “comprehensive strategic partnership” between the two countries.
This historic shift in relations elevates the US to the top tier of Hanoi’s bilateral ties hierarchy, a position previously reserved for China, Russia, India, and South Korea. Vietnam, in the past, refrained from upgrading ties with the US to avoid upsetting China.
The upgraded ties hold significant security implications, as the US considers developing Asian countries crucial in countering China’s power in the Indo-Pacific region. Both sides also acknowledge the substantial economic opportunities that arise from this change. Vietnam, which experienced the fastest economic growth in Asia last year, now views the US as its largest export market.
Leading technology companies like Apple, Google, and Dell have been expanding their presence in Vietnam in recent years, seeking to diversify their supply chains away from China due to the deteriorating relations between Beijing and Washington.
Among the prominent deals announced includes Vietnam Airlines’ $7.8 billion purchase of 50 737 Max jets from Boeing, artificial intelligence projects involving Nvidia and Microsoft, and the establishment of semiconductor design centers in Ho Chi Minh City by California-based groups Synopsys and Marvell. Another notable agreement involves a new US-Vietnam chip partnership aimed at supporting resilient semiconductor supply chains for US industries. The US is particularly concerned about China’s advancements in chip development and has been rallying support from allies to enforce export controls on semiconductors and chipmaking equipment.
The White House announced that an Amkor factory, worth $1.6 billion, near Hanoi will begin operations in October. This factory will assemble, package, and test chips. Additionally, AMI AC Renewables and US industrial group Honeywell will collaborate on a pilot project to develop Vietnam’s first battery energy storage system. Nobu Hospitality, based in New York and known for its Japanese restaurant chain, will establish its presence in Vietnam through a partnership with Viet Capital Real Estate.
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