Vietnam is unlikely to meet its 2027 target for a trial production run at its first semiconductor plant, and a deal to buy chipmaking equipment from ASML has yet to be reached, Reuters reported on 26 October 2026, citing people familiar with the project. The plant’s cost has been estimated by authorities at about $1.3 billion.
Developer Viettel, a military-run telecoms and defence group, told Reuters the project was “progressing in line with the established plan and schedule.”
Business Pill · VERTICAL INTEGRATION
A short explainer on vertical integration: why every layer takes a cut. It teaches the general idea only and says nothing about Vietnam, Viettel or ASML.
The key insight: As we read it, Reuters describes a plant that exists on paper and in a January groundbreaking: the site near Hanoi is still covered in vegetation, satellite images show no buildings, and the deal for a lithography machine, which prints circuit patterns onto wafers, has not been reached.
The site on the outskirts of Hanoi remains covered in wild vegetation, a Reuters visit last week showed, and satellite images taken in January by Planet Labs PBC and in October by Airbus confirm that no buildings have been constructed, Reuters reported.
A person with direct knowledge of the project told Reuters the 2027 target would probably not be achieved, because of Viettel’s lack of experience in building chip factories and administrative hurdles in quickly securing government funding. The government-mandated project is ongoing but the timeline is unclear, the person said.
Item
What was reported
Trial production target
2027; unlikely to be met, per a person with direct knowledge
Full operation target
2030, per Viettel in January
Estimated cost
About $1.3 billion, per authorities
Process technology
32 nanometres in a January presentation; the reference was later removed from Viettel’s website
Equipment
Talks with ASML on a deep ultraviolet (DUV) lithography machine; no deal yet
Estimated plant cost: Vietnam’s first chip plant (Viettel, Hanoi), about $1.3 billion per Vietnamese authorities; Tata Electronics’ Gujarat project with PSMC, $11 billion per Tata. Source: Reuters, 26 October 2026.
The ASML Talks
Talks with ASML have been underway for months, three people familiar with the matter told Reuters, and two said they covered the purchase of a DUV lithography machine, needed to print circuitry patterns onto silicon wafers. Reuters said it could not learn why no agreement had been reached or which type of DUV machine was under discussion, which would indicate whether the sale could be subject to Dutch export controls.
A representative for ASML declined to comment on the talks, and Vietnam’s finance ministry did not respond to requests for comment, Reuters reported.
ASML’s Supply Outlook
ASML said this month it may not fully meet demand for its most advanced machines over the next two years because of the AI boom, with supply constraints for older-generation equipment expected to be less severe, Reuters noted. ASML reported third-quarter net sales of €11.66 billion on 14 October, as our ASML results piece reported.
Elsewhere in the AI supply chain, some Samsung Electro-Mechanics capacitors now carry a 61-week standard lead time at DigiKey, as our piece on capacitor waits reported, and Amazon chief executive Andy Jassy said of AWS computing capacity that 2027 is largely sold out, as our piece on the suppliers’ sold-out claims reported.
Where Vietnam Already Fits
Viettel said in January it wanted to supply chips to the aerospace, telecom and auto sectors, and the project is part of the ruling Communist Party’s plan for Vietnam to become a high-income economy by 2045, Reuters reported. Efforts to attract foreign investors to build a chip manufacturing plant in Vietnam have been unsuccessful, according to industry sources cited by Reuters.
Vietnam is instead a fast-growing hub for semiconductor assembly, testing and packaging, Reuters wrote: Intel, Amkor Technology and Hana Micron operate large factories there, and Samsung Electronics is planning a chip-testing facility. By comparison, Reuters noted, Tata Electronics has said its $11 billion project in Gujarat with Taiwan’s PSMC will begin with 55- and 90-nanometre processes before adding 28-nanometre production.
The Structural Read
As we read it, the stated reasons are about building the plant: a person with direct knowledge pointed to Viettel’s lack of experience in building chip factories and to hurdles in quickly securing government funding, Reuters reported.
As we read it, the gap with India is one of scale and starting point: Tata Electronics has said its $11 billion Gujarat project will begin at 55 and 90 nanometres, while Viettel cited 32 nanometres in January before removing the reference, Reuters wrote.
As we read it, Vietnam’s current chip role is downstream: Intel, Amkor Technology and Hana Micron operate large assembly, testing and packaging factories there, Reuters reported.
Viettel, statement to Reuters, 26 October 2026
“progressing in line with the established plan and schedule.”
Three Implications
FOR VIETTEL The company says activities are carried out in phases and that it will provide further updates at an appropriate time, Reuters reported.
FOR ASML Talks with ASML have run for months, three people told Reuters, and two said they covered a DUV machine; no deal has been reached, and ASML declined to comment on the talks.
FOR VIETNAM’S CHIP PLANS The plant is part of the plan to move up the semiconductor value chain, and Viettel has not disclosed whether it is partnering with an established chipmaker, Reuters reported.
The analysis puts it this way: “You cannot ship silicon without foundries.”
As we read it, the Reuters report shows how far a new entrant is from that foundry layer: an estimated $1.3 billion plant with no building yet and no lithography deal. The analysis was published in June 2026 and does not discuss Vietnam or Viettel.
What Is Not Established
The view that the 2027 target will be missed comes from one person with direct knowledge of the project, and Viettel says the project is on schedule. Reuters could not establish why no ASML deal has been reached or which machine is under discussion. Viettel has not disclosed whether it is partnering with an established chip manufacturer. We did not contact Viettel or ASML.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
Vietnam’s first chip plant, estimated at about $1.3 billion, is unlikely to start trial production by its 2027 target and has no deal yet with ASML for a lithography machine, Reuters reported on 26 October 2026, citing people familiar with the project. Viettel told Reuters the project is progressing in line with its plan and schedule.
A note on sourcing. This piece is based on a Reuters exclusive published on 26 October 2026, read in full as syndicated by The Star. Claims about the timeline come from people familiar with the project, whom Reuters did not name; Viettel says the project is on schedule. We did not contact Viettel or ASML.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
