Vietnam's Position in the Semiconductor Chip Race

Vietnam's semiconductor industry is facing immense pressure and competition amid ambitious development plans worth hundreds of billions of dollars from developed nations. While the sector has emerged since the early 1980s, Vietnam's semiconductor landscape remains relatively underdeveloped due to the absence of a national-scale development strategy, resulting in limited participation from domestic enterprises primarily dominated by foreign entities. 

Vietnam has risen as a promising player in the semiconductor sector, boasting strategic geographical positioning, advancing infrastructure, tech-savvy populace, and abundant youthful workforce with creativity. The semiconductor industry in Vietnam is poised for significant growth, with forecasts by the Southeast Asia Semiconductor Industry Association projecting over 6% growth from 2022 to 2027. 

Furthermore, prominent semiconductor giants are setting up manufacturing facilities in Vietnam. Kine SIC Semi (USA) plans to establish a $200 million chip plant in Bac Ninh. Previously, Hana Micron (South Korea) inaugurated a semiconductor manufacturing plant in Bac Giang, aiming to elevate total investment to over $1 billion, generating $800 million in revenue. Similarly, Amkor's largest semiconductor factory worldwide in Bac Ninh with a total investment of $1.6 billion marks Vietnam's penetration into the global semiconductor market, potentially positioning the country as a growth hub for the industry. 

According to Tran Duy Dong, Deputy Minister of Industry and Trade, the semiconductor industry garners significant attention from many developed and developing nations, with substantial investments being made to attract semiconductor ventures. 

Despite the opportunities, Vietnam faces challenges in large investment requirements, demanding specialized infrastructure, and complex manufacturing lines. Notably, competition pressures from countries like China, the US, and Europe, which have announced multi-billion dollar chip plans, pose significant challenges. Moreover, the increasing complexity of semiconductor technology necessitates substantial investment in research and development to maintain competitiveness. Vietnam's current labor force, while abundant, lacks the necessary skills and expertise to meet industry demands. 

Choosing Suitable Stages: 

To overcome these challenges, Vietnam needs comprehensive policy mechanisms, including incentives for high-tech projects, infrastructure improvements, and workforce quality enhancement. The Ministry of Industry and Trade is collaborating across sectors to develop a plan to train 50,000 engineers by 2030 to address the semiconductor talent shortage. 

According to Phung Viet Thang, National Director of Intel Vietnam, the plan to develop 50,000 engineers poses a significant challenge. Nevertheless, with concerted efforts, he believes the initiative will yield success. Additionally, he advises startups to strategically choose stages with less investment and focus more on innovative approaches for success. 

Vu Duy Thuc, co-founder of New Turing Institute & VietAI, highlights Vietnam's advantage in its talented diaspora working in major innovation centers worldwide. Encouraging these talents to contribute to their homeland could rapidly propel Vietnam's semiconductor industry, he suggests. 

Seow Choo Han, Southeast Asia Business Director at Cadence Design Systems, emphasizes that nations willing to participate in the semiconductor race must adhere to product greenification requirements to gain a competitive edge.