Vietnam’s Da Nang eyes multi-million-dollar incentives for AI, chip projects

The Da Nang Department of Science and Technology said on Monday that it was seeking feedback on a draft resolution outlining support for key digital technology projects, semiconductor investments, AI data centers, and chip design companies.

Under the proposal, eligible projects could receive support covering up to 20 percent of factory construction and technical infrastructure costs.

The subsidy would be capped at VND5 billion (US$192,000) for key digital technology manufacturing projects, VND50 billion ($1.92 million) for semiconductor projects, and VND30 billion ($1.15 million) for AI data centers.

The city also proposes covering up to 20 percent of the cost of new machinery and equipment, with maximum support of VND15 billion ($576,000), VND200 billion ($7.68 million), and VND70 billion ($2.69 million), respectively.

To qualify, semiconductor projects must have a total investment of at least VND1 trillion ($38.4 million) and plans covering activities from research and development and chip design to manufacturing, packaging, and testing.

AI data centers must have an investment of at least VND500 billion ($19.2 million), meet Tier III standards or equivalent, and use dedicated AI servers.

AI servers must account for at least 60 percent of total equipment costs, while power usage effectiveness must not exceed 1.4.

For chip design companies, the draft proposes covering 50 percent of the cost of training Vietnamese employees, capped at VND500 million ($19,200) per company per year.

It also proposes covering 50 percent of expenses for research and development, prototype production, testing, measurement, and chip prototype validation, with support capped at VND5 billion ($192,000) per project.

Specialized machinery, equipment, and technology could receive support of up to 50 percent of costs, capped at VND15 billion ($576,000) per project.

Eligible chip design companies must have project contracts worth at least VND50 billion ($1.92 million) and employ at least 20 engineers, experts, and project managers with at least five years of experience in the semiconductor sector.

The draft also proposes covering 50 percent of prototype production costs for products directly supporting the semiconductor industry, as well as certain related machinery, equipment, and tools, with a maximum subsidy of VND10 billion ($384,000) per project.

To receive support, projects must be completed and formally accepted, while eligible expenses must undergo final settlement, auditing, or valuation.

Applications must be submitted within 12 months of project completion.