In a significant shift in its Asia-Pacific strategy, Nvidia Corp, a leader in AI technology, has announced plans for an aggressive expansion into Vietnam. This move comes in the wake of challenges the company faces in China due to recent U.S. chip restrictions.
CEO’s statement in Hanoi
Jensen Huang, Nvidia’s CEO, highlighted the company’s intentions during an event in Hanoi, Vietnam. In his first visit to the country, Huang emphasized the existing strong ties with Vietnam, citing millions of local clients. He expressed Nvidia’s commitment to deepen relationships with critical Vietnamese tech firms such as Viettel, FPT, Vingroup, and VNG.
Investments and collaborations
Nvidia has invested $250 million in Vietnam, collaborating with leading tech companies. These partnerships focus on deploying AI technologies across various sectors, including cloud services, automotive, and healthcare. This information aligns with a White House document released in September, which underscored the growing partnership between Vietnam and the U.S. in these areas.
At the event, Nguyen Chi Dzung, Vietnam’s investment minister, spoke about the country’s strategic plans to incentivize investments in the semiconductor and AI industries. He urged Nvidia to consider establishing a research and development facility in Vietnam, reflecting the government’s proactive approach to attracting high-tech investment.
For Nvidia, diversifying its market presence is crucial, especially considering the ongoing restrictions in China. As mentioned in its third-quarter earnings report, the company has experienced a significant decline in sales to China. Expanding into Vietnam could mitigate these challenges and contribute positively to Nvidia’s global strategy.
Vietnam’s advantage in the tech industry
Vietnam’s gain in this scenario is juxtaposed against the backdrop of China’s loss due to investment shifts. The Vietnamese government is poised to capitalize on this opportunity, offering incentives to attract tech investments moving out of China.
In addition to Vietnam, Nvidia’s 10-Q report reveals that Singapore, another Southeast Asian nation, accounted for 15% of the company’s revenue in the third quarter. This underscores Singapore’s emerging status as a favored tech hub, bridging Eastern and Western tech companies.
Closing the week with a 1.95% increase at $475.06, as per Benzinga Pro data, Nvidia’s market performance seems resilient amidst this strategic shift. With these developments, Nvidia is poised to overcome its challenges in China and strengthen its position in the rapidly growing Southeast Asian tech market. The company’s focus on Vietnam reflects a strategic foresight, aligning with the region’s emerging status as a hub for technology and innovation.
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