Washington is prepared to pour funds into Hanoi’s chip industry as a move to fortify supply chains, said Jose Fernandez, U.S. Under Secretary of State for Economic Growth, in a quote from Japan’s Nikkei Asia newspaper. 

The U.S. is targeting seven countries, including Vietnam, for part of its CHIPS and Science Act (CHIPS Act), which includes foreign aid of US$500 million for improving semiconductor training, cybersecurity, and business climates globally, the newspaper reported on Monday, citing Under Secretary Fernandez, who recently visited Vietnam. 

Vietnam should take action before it is too late to attract investment in vital industries, like clean energy and minerals, which can be used for electric vehicles and batteries, Fernandez told Nikkei Asia.

The U.S. will allocate foreign aid under the CHIPS Act based on recommendations by the Organization for Economic Cooperation and Development (OECD) that are due in February. 

“We went through a list of countries that we felt had the potential to benefit from our support, and Vietnam was one of the first countries that we thought about,” Fernandez said in an interview. 

Vietnam is a leading exporter of electronics, clothing, and food, and is considered a key node in U.S. efforts to shift its supply chains away from China.

According to the U.S. Geological Survey data, Vietnam ranks second globally for reserves of rare-earth metals, after only China, though it is unclear how much can be mined.

The U.S. aims to regain its position in a rare-earth market that has been dominated by China's lower-cost production for decades, which Washington sees as its strategic vulnerability, since there was no rare-earth production in the U.S. as recently as 2017.

In reviving its own mines, America has entered a deal with 13 countries to coordinate financial and diplomatic support on minerals, and has offered to help Vietnam survey its rare-earth reserves.  

Fernandez pointed out that the world is in a great hunger for critical minerals, and emphasized that the competitive advantage of the U.S. and partners is to do mining “that benefits communities, that does not degrade the environment and that brings additional technology and investment.”

When asked for comments about U.S. investment moving out of China, he said this is an opportunity for Vietnam, which potentially becomes “an even greater manufacturing hub.”

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