US-based maker of wafer-fabrication equipment Lam Research held discussions with Vietnam’s prime minster about investing in local production to diversify its supply chain, the government’s news portal reported.

Lam group VP of global operations Karthik Rammohan met with Prime Minister Pham Minh Chinh in Hanoi, outlining plans to partner with South Korea-based Seojin to set up domestic operations with an initial investment of between $1 billion and $2 billion.

According to the government disclosure Lam would look to invest directly to expand production in future phases.

Lam’s 2023 annual results showed China accounted for 26 per cent of total revenue, down from 31 per cent in 2022 and 35 per cent in 2021, with sales in the US climbing to 9 per cent from 6 per cent during the period. 

The report highlighted wafer fabrication equipment spending declined in 2023 primarily from weak demand for memory. In addition, it said US government controls significantly impacted trade with China for chip equipment and related parts and services.

Seojin has facilities in Bac Ninh and Bac Giang provinces in the north, where Samsung has chip and smartphone plants.

Contract manufacturer Foxconn and Intel also have factories in Vietnam.