Vietnam is considering building its first chip factory, and US officials warn that the cost is too high.

CTOnews.com Despite warnings from U.S. industry officials about high costs, Vietnam is in talks with chip companies to increase investment in the country and possibly build its first chip manufacturing plant.

Vietnam already has Intel's largest semiconductor packaging and testing facility in the world and is developing a strategy to attract more semiconductor investment, including from foundries focused on manufacturing chips.

Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council, revealed that meetings have been held with six US chip companies in recent weeks, including meetings with fab operators. However, specific company names were disclosed because negotiations were still at an early stage.

One chip executive, who declined to be named, said talks with potential investors involved US semiconductor foundries and LSMC.

It is worth mentioning that the President of the United States visited Hanoi in September and concluded a bilateral agreement. The United States will provide $2 million (CTOnews.com notes: currently about RMB 14.64 million) in seed funding to launch a comprehensive workforce development program in Vietnam to jointly develop hands-on teaching laboratories and training courses for semiconductor assembly, testing and packaging.