Vietnam's beach town Danang seeks finance and tech sector boost
City official aims to lure AI and semiconductor projects, including from US giants
Danang Software Park 2 is one of the city's key industrial parks for attracting foreign tech companies. (Photo by Nguyen Van Anh)
The central tourist beach town of Danang has been known for its soft sand, clear water and hand-shaped Golden Bridge. Now, it is emerging as Vietnam's finance, technology and trade hub.
Luong Nguyen Minh Triet, chairman of Vietnam's Danang People's Committee, in an exclusive interview with Nikkei Asia discussed plans to establish an international financial center in the city. The IFC is meant to attract capital and funding to help meet the Southeast Asian country's ambitions to achieve a GDP growth target of double-digit expansion from 2026.
"We are focusing on perfecting the ecosystem of infrastructure, connectivity, and policy to create strong competitiveness on an international scale, as well as a transparent, favorable and attractive environment to attract investors, especially strategic investors," said Triet, one of Danang's most powerful officials.
The country's top leaders have approved the launch of IFCs in the economic hubs of Ho Chi Minh City and Danang. Danang's will focus on green finance, fintech, digital assets and a financial innovation ecosystem.
Triet said Danang's IFC will be headquartered in a building 22 floors high in the Danang Software Park 2 development, while the city will build extra infrastructure for the IFC on the Son Tra peninsula in the city's northeast. It is also exploring constructing artificial islands in Danang Bay.
The Danang area has recently expanded by nine times to more than 11,000 square kilometers after the city merged with the province of Quang Nam from July as part of a nationwide administrative reform.
In June, Danang was also approved to set up Vietna's first-ever free trade zone (FTZ) spanning nearly 1,900 hectares, which Triet said will allow the city to promote a more open economy by integrating production, e-commerce, logistics, and innovation.
"Danang does not wait for opportunities, we create opportunities," Triet said. "We believe that if we dare to think, to do and to break through, Danang can completely step out into the world with a new courage and stature."
But for a city aiming to become Vietnam's Singapore, finance and trade are not the only drivers of growth.
Near the city's northern tip sits the newly launched Software Park 2, a 93,000-square-meter area looking out onto the local Han River and reserved by the city to host technology companies.
It is part of Danang's latest efforts to lure technology investments in the artificial intelligence (AI) and semiconductor sectors.
"Danang has attracted global technology firms such as Synopsys, Marvell, Renesas and domestic corporations such as FPT. Potential partners such as Intel, Nvidia and Qualcomm are researching investment opportunities here," said Triet.
"Our city is finding solutions to strive to become the region's center for technology, data, semiconductor and AI," Triet added.
In March, Vietnam's top technology company FPT launched an R&D center on AI and semiconductors at Software Park 2. Danang also hosts one of FPT's biggest campuses. The FPT Complex building in the city can sit 10,000 staff.
"It lays the foundation for a vision that we call the 'Silicon Bay' of Danang. We are also deploying a fabrication lab worth nearly $70 million and a regional data center, as well as expanding the Software Park 2 to create a solid foundation for the digital industry," Triet said.
Last year, Danang became the first city in Vietnam to offer a personal income tax exemption for 5 years for individuals working in the semiconductor and AI sectors. The city also offers exemptions from corporate income tax and import tax, free rent, cash payouts for scientists, accommodation support, cash payments for technological inventions, and long-term visas for experts.
Danang People's Committee Chairman Luong Nguyen Minh Triet poses during an interview with Nikkei Asia on Aug. 8. (Photo by Nguyen Van Anh)
Local start-ups in the AI and semiconductor sectors also get free rent at the Software Park 2, which had been delayed by the COVID pandemic, as well as legal complexities, until it was revived by city leadership last year.
Danang has 25 companies working in the semiconductor sector, a threefold increase from 2023, and 41 companies in the AI sector. The city enrolled 600 students across its 19 universities in the semiconductor field last year and aims to increase the number to 1,000 in 2025, Triet said.
The Software Park 2, as it stands, has two eight-floor buildings, one of which is expected to be fully occupied by the end of this year, while the other's construction is being finalized. The surrounding area includes a 20-floor building and plots of land for other projects.
"With the participation of large global and domestic technology firms, we will have the conditions to build Danang into a dynamic innovation ecosystem," said Triet.
(Source: https://asia.nikkei.com/economy/vietnam-s-beach-town-danang-seeks-finance-and-tech-sector-boost)
