(Part 3) Semiconductor Production: Vietnam's Potential

Embarking on an impactful journey, Vietnam is poised to realize its prowess in semiconductor production. In a landscape propelled by the global demand for innovative semiconductors and cutting-edge semiconductor devices, Vietnam emerges with strategic ambitions in the domain of semiconductor manufacturing. As the world increasingly relies on these technological pillars, Vietnam's foray into semiconductor production not only addresses the surging demand but also establishes itself as a significant player in the ever-evolving semiconductor industry. This article, building on the exploration of Vietnam's potential in the preceding piece, conducts an in-depth analysis of the nation's capabilities and growth prospects in semiconductor production.

Vietnam's Semiconductor Production Landscape

Chip Imports Surge: A Market Share Ascension

Vietnam's ascendancy in semiconductor production is underscored by a significant surge in chip exports to the US. According to Bloomberg, chip imports from Vietnam to the US soared from $321.7 million in February 2022 to $562.5 million in the same month a year later, capturing an 11.6% market share. This remarkable increase positions Vietnam as a notable player, trailing only Malaysia and Taiwan (China) in the US market.

Investment Influx: Recognizing Vietnam's Potential

Acknowledging Vietnam's prowess in semiconductor production, major industry players have initiated substantial investments in the country. Intel, a prominent player in the semiconductor market, has established a state-of-the-art chip assembly, packaging, and testing factory in Vietnam. Valued at over $1 billion, this facility stands as Intel's largest project globally. Additionally, Amkor Technology, a key provider of semiconductor packaging services, is poised to inaugurate a $1.6 billion factory in Bac Ninh, Vietnam, further solidifying the nation's status as an attractive hub for semiconductor investments. Samsung Group from South Korea has also expressed intentions to manufacture semiconductor parts in Vietnam, showcasing the country's appeal to global tech giants.

Roles in Chipmaking: Assembling Strengths

The dynamics of chipmaking involve three crucial phases: designing, foundry, and packaging. In this intricate process, Vietnam primarily engages in the final phase, contributing to assembly, testing, and packaging. Despite packaging representing only 6% of a chip's value in the supply chain, Vietnam's strategic role in the global semiconductor landscape cannot be overlooked. While the industry's complexity necessitates global collaboration, Vietnam's unique position allows it to contribute significantly to the supply chain. To capitalize on this, the country faces a pivotal choice between expanding its production sector or enhancing skills in design and packaging. Industry experts advocate for the latter, emphasizing the importance of developing design expertise. With a growing focus on training engineers and nurturing design capabilities, Vietnam aims to position itself as a key player in the semiconductor industry. FPT University's recent establishment of a dedicated department for semiconductors and circuits underscores the country's commitment to addressing skill shortages and fostering expertise in the semiconductor domain. The call for government investment in training tens of thousands of semiconductor experts reflects Vietnam's proactive approach to harnessing its potential in semiconductor production.

Government Support and Industry Collaboration in Semiconductor Production

Government Initiatives Fostering Semiconductor Production

Vietnam's government has strategically positioned itself to champion the growth of the semiconductor industry through targeted initiatives and investment-friendly policies. To incentivize businesses, the government offers attractive measures, such as exemptions from land and water surface rents for enterprises investing in the sector. In centralized high-tech parks, eligible businesses can enjoy a reduction of up to 50 percent in rent. Notably, companies investing in socio-economically deprived areas receive full exemptions from land and water surface rents for the duration of their lease, encouraging investments in less developed regions.

The government's commitment to digital transformation serves as a catalyst for the semiconductor chip industry's growth. Recognizing the industry's role in achieving the nation's long-term goal of becoming a digital economy, Vietnam's government has implemented policies and initiatives to propel its development. Various funds, including the National Technology Innovation Fund (NATIF) and the Vietnam-Korea IT Incubator (VKII), have been established to provide financial support for research, development, and start-ups in the semiconductor industry. These initiatives collectively create a conducive environment for businesses to thrive in Vietnam's growing semiconductor landscape.

Collaborative Efforts: Public-Private Partnerships Driving Innovation

In a significant collaboration, Synopsys Inc. and Vietnam's National Innovation Centre (NIC) have joined forces to elevate integrated circuit (IC) design expertise in Vietnam. This partnership involves Synopsys's support for the establishment of a chip design incubation center by NIC, fostering a conducive environment for innovation and skill development in semiconductor design. Moreover, the Vietnam-US Comprehensive Strategic Partnership has recognized Vietnam's substantial potential in the semiconductor industry, emphasizing initiatives to enhance human resources in this sector. The partnership includes the provision of a seed fund of 2 million USD by the US, reinforcing collaborative efforts between nations to advance Vietnam's standing in semiconductor production.

Building a Skilled Workforce: Projected Growth in Semiconductor Human Resources

Vietnam's ambitious project for semiconductor human resources development until 2030 aims to train about 30,000 to 50,000 engineers and experts. FPT, a prominent player in Vietnam's tech landscape, is poised to play a crucial role in this endeavor. Tran Dang Hoa, Chairman of FPT IS and FPT Semiconductor, outlines FPT's commitment to training 10,000 semiconductor engineers. This initiative includes collaboration with foreign educational institutions to ensure a comprehensive and globally relevant training program. The government's emphasis on training a significant number of skilled professionals underscores its vision for Vietnam to emerge as a hub for semiconductor talent, contributing significantly to the industry's growth.

Final Thoughts

As we conclude our insightful journey into Vietnam's role in semiconductor production, it's clear that the nation emerges as a key player in shaping the future of this dynamic industry. Emphasizing the significant potential within Vietnam's semiconductorlandscape, we extend an invitation to unlock unprecedented opportunities with Viettonkin's specialized guidance in semiconductor investment. Seamlessly navigate the intricacies of this rapidly evolving sector with our strategic insights and tailored support today.