The semiconductor industry in Vietnam is rapidly growing and attracting interest from domestic and international investors. In recent years, Vietnam has witnessed a boom in this sector, with major corporations such as Intel, Samsung, and Micron Technology investing in the market. The development of the industry has been driven by the increasing demand for electronic products, especially in the context of the Fourth Industrial Revolution, along with the establishment of industrial zones and research and development centers.
Key companies are not only ramping up production but also transferring advanced technology, enhancing the production capacity and technological proficiency of the sector. Vietnam boasts several competitive advantages, including low labor costs, supportive government policies, a favorable geographical location, and abundant human resources. These factors make Vietnam stand out in the semiconductor industry, laying a solid foundation for future growth.
Two Events Positively Impacting Vietnam-US Semiconductor Cooperation
The Event Connected General Secretary To Lam with Leading Experts in Semiconductors and AI
In September, during a seminar on enhancing cooperation between Vietnam and the U.S. in the semiconductor and AI industries, General Secretary and President To Lam praised insightful comments from major U.S. tech corporations. The meeting aimed to explore opportunities for collaboration in these key sectors, which are strategically important to Vietnam’s efforts to boost international competitiveness and foster high-tech investment and innovation.
General Secretary To Lam emphasized that international cooperation and building a sustainable value chain are essential for success in advanced industries like semiconductors and AI. He also welcomed U.S. businesses to invest in Vietnam, not only to develop technology but also to create innovative, sustainable solutions.
Vietnam aims to train 50,000 semiconductor engineers by 2030, with FPT playing a pivotal role. FPT Semiconductor has launched Vietnam’s first “Made in Vietnam” semiconductor chip and committed to major investments in AI and semiconductor design. The company has collaborated with global tech leaders such as Nvidia, Landing AI, and Mila and plans to build an AI factory to boost high-tech development in Vietnam. FPT contributes significantly to the semiconductor industry’s growth through this strategy and strengthens Vietnam’s position in the global tech supply chain.
With participation from major investors like AMD, Google, and Marvell, Vietnam is expected to create a favorable environment for semiconductor research, development, and production. U.S. investors and Vietnam will continue to promote a comprehensive strategic partnership, advancing the global semiconductor industry. General Secretary Tô Lâm reaffirmed that Vietnam would prioritize attracting high-tech projects, particularly in semiconductors, AI, and renewable energy, to enhance the competitiveness of its economy.
The Meeting Between the Prime Minister and the President of the US Semiconductor Industry Association
The meeting between Prime Minister Pham Minh Chinh and the President of the US Semiconductor Industry Association (SIA), Mr. John Neffeur, on December 7, 2023, had wide-reaching positive impacts on the Vietnamese semiconductor industry. In the context of a rapidly evolving global economy, the semiconductor industry has become a strategic sector not only for the US but also for many other nations, including Vietnam.
Prime Minister Pham Minh Chinh emphasized that within the framework of the Comprehensive Strategic Partnership between Vietnam and the US, science, technology, and innovation are key pillars. It not only demonstrates the Vietnamese commitment to developing high technology but also highlights its long-term vision of collaborating with international partners. The semiconductor industry, with its vast potential and inherent advantages, has been identified as one of the priority sectors that Vietnam must focus on developing.
John Neffeur, President of the SIA, stated that Vietnam is not only an attractive destination for US investors but also holds a strategic role in supplying human resources for the semiconductor industry. He stressed that the US is currently facing a workforce shortage in this sector, and Vietnam has become a vital resource to address this gap, especially in the aftermath of the COVID-19 pandemic.
Additionally, nearly 30,000 Vietnamese students studying in the US each year, along with approximately 2.2 million Vietnamese expatriates in the US, create an important bridge for knowledge and experience transfer.
Neffeur expressed confidence that Vietnam-US relations would quickly capitalize on new opportunities in this sector, particularly in chip design, a field that requires less investment than production. This cooperation not only brings economic benefits to both countries but also strengthens diplomatic and strategic ties between Vietnam and the US in an increasingly globalized world.
President Joe Biden’s State Visit to Vietnam
President Joe Biden’s state visit to Vietnam in September 2023 had a profound and positive impact on the semiconductor industry. This was not just an important diplomatic event but also marked a significant step in upgrading bilateral relations to a Comprehensive Strategic Partnership.
A key highlight of the visit was the announcement of a funding package of up to USD 2 million to boost the Vietnamese semiconductor workforce. This funding will not only improve the quality of human resources but also facilitate the development of specialized training programs, equipping engineers and experts in the semiconductor industry with the necessary skills to meet the growing market demands. This is crucial, as the semiconductor industry faces a shortage of highly skilled labor, which could hinder its future growth. With this funding, Vietnam has a great opportunity to develop a highly qualified workforce capable of competing not only in the region but also on the global stage.
The objectives of Vietnam-US cooperation in the semiconductor sector are clearly defined and diverse, covering key areas such as design, manufacturing, training, and research and development. US support in these areas will help Vietnam develop a strong semiconductor ecosystem, from research and product development to production and marketing. Cooperation with leading US companies will not only enhance Vietnam’s manufacturing capabilities but also facilitate the transfer of advanced technology from the US, leading to the creation of higher-quality products that meet the global semiconductor market’s demands.
With US support, Vietnam can achieve stronger growth in the semiconductor industry, not only through production but also by designing and developing high-tech products. It will help Vietnam become not just a manufacturing country but also an innovation hub in the technology sector.
Opportunities to Strengthen the Vietnamese semiconductor industry
The Vietnamese semiconductor industry is now presented with significant opportunities to strengthen its capacity and achieve sustainable development, thanks to investment interest from leading global tech corporations, especially from the US. This development not only brings economic benefits but also contributes to the modernization of production technology and the improvement of domestic human resource quality.
Investment and Technological Development
Investment from US companies in the Vietnamese semiconductor sector is creating substantial positive impacts on production technology. Major tech corporations such as Intel, Qualcomm, and Micron Technology have been establishing manufacturing plants and research and development centers in Vietnam. This not only gives Vietnam access to modern production technology but also provides opportunities to transfer cutting-edge technologies from world-leading companies.
These investment projects often come with strict standards regarding production processes and product quality, creating a competitive environment that encourages domestic enterprises to enhance their production capabilities. Moreover, adopting new technology will allow Vietnam to strengthen its capacity to produce high-quality semiconductor products, meeting the growing global market demand.
FPT Semiconductor has signed a strategic partnership with Silvaco, a leading U.S. company in semiconductor software and automation. This partnership marks a significant advancement in Vietnam’s semiconductor industry, focusing on workforce development and technology enhancement, particularly for training Vietnamese engineers. Specifically, FPT, Silvaco, and FPT University will collaborate to establish the Vietnam Semiconductor Training Center, contributing to national human resource initiatives.
FPT also offers intellectual property (IP) solutions based on Silvaco’s platform and serves as the exclusive distributor of Silvaco’s semiconductor software in Vietnam. Furthermore, FPT collaborates with Nvidia, applying AI in fields such as cloud storage and healthcare, as part of its strategy to boost competitiveness and promote digital technology in Vietnam.
Additionally, the presence of large tech corporations is also fostering an ecosystem that supports startups and small businesses in the semiconductor sector. These companies can leverage the infrastructure, technology, and experience of large corporations to develop products and expand their markets. This not only enhances the Vietnamese competitive position in the semiconductor industry but also promotes domestic innovation.
Workforce Training and Development
Maximizing the opportunities from foreign investment requires a strong focus on training and developing human resources. Training programs and educational cooperation between Vietnam and US partners are expanding, aiming to improve the skills and knowledge of the semiconductor workforce.
Many universities and research institutes in Vietnam have established partnerships with leading US educational organizations and businesses to develop specialized training programs in chip design, manufacturing, and related fields. These programs not only expose Vietnamese students and engineers to the latest knowledge but also provide them with practical work environments, thereby enhancing their competitiveness.
Moreover, US businesses are actively involved in training the Vietnamese workforce by organizing courses, workshops, and internship programs. This cooperation helps improve the skills of the labor force and creates attractive job opportunities for Vietnamese students, making it easier for them to enter the semiconductor job market.
In addition to its partnerships with Silvaco and Nvidia in the technology sector, FPT has also established collaborations with several major U.S. companies to advance education in semiconductors and artificial intelligence (AI). One key partner is LandingAI, a leader in machine vision and AI. This partnership has facilitated the integration of AI into FPT’s educational systems, particularly in training highly skilled professionals in the semiconductor industry.
By combining technological investment with workforce development, Vietnam is laying a solid foundation for the growth of its semiconductor industry. These efforts not only boost production capacity but also open new opportunities for the sustainable development of this industry in the future.
Challenges in Development Cooperation
While the Vietnamese semiconductor industry enjoys growth opportunities from foreign investment and international cooperation, it still faces several challenges. These challenges affect competitiveness and determine the success or failure of building a sustainable semiconductor ecosystem in Vietnam.
Technological Barriers
One of the biggest challenges for Vietnam is technological barriers. The semiconductor sector is highly technical and requires advanced manufacturing technology. While major companies from the US and other developed nations operate with the latest technologies, Vietnam still faces difficulties in accessing and applying these technologies.
Many semiconductor manufacturing plants in Vietnam are not yet equipped with the advanced equipment and technologies needed to produce high-quality products. As a result, Vietnamese products struggle to compete with those from developed countries, where modern technology and more efficient production processes are in place.
Furthermore, a shortage of skilled labor and expertise is also a major challenge. Although Vietnam has many young students and engineers, not all are adequately trained in semiconductor technology. Thus, developing high-quality training programs and strengthening cooperation with foreign educational institutions and businesses is crucial for improving workforce skills.
Additionally, a lack of research and development (R&D) in the semiconductor industry is a significant barrier. Many companies in Vietnam lack research labs and sufficient budgets for R&D. This makes it difficult for Vietnam to develop unique products with high-added value, which the global market increasingly seeks. To overcome this challenge, support from the government and international organizations in R&D investment is essential.
Global Competition
The global semiconductor industry is highly competitive, with many countries and regions actively participating. Tech giants like the US, China, South Korea, and Taiwan not only possess advanced technology but also have large corporations capable of making significant investments in R&D. This puts immense pressure on emerging markets like Vietnam to establish their position in the global market.
Vietnam needs to seize opportunities and adapt to this competitive landscape by focusing on areas where it holds advantages, such as chip design and component manufacturing. On the one hand, developing unique, high-value products will help Vietnam create a competitive edge over similar products. It can be achieved through investment in R&D and cooperation with international educational institutions and businesses to improve design and manufacturing capabilities.
On the other hand, building cooperative relationships with leading tech companies and international research organizations will help Vietnam modernize its production technology. Through such partnerships, Vietnam can learn from the experiences and advanced technologies of developed countries, thereby improving production processes and product quality.
Additionally, Vietnam should consider implementing supportive policies and incentives for businesses in the semiconductor sector. These policies could include tax reductions, financial support for R&D, and facilitating technology transfers from international partners. Creating a favorable investment environment will encourage both domestic and foreign businesses to participate in the semiconductor industry, thereby promoting sustainable growth.
To address these challenges, Vietnam has developed a long-term strategy to boost workforce training and attract foreign investment. For FPT, this is a crucial time, as it has established the Semiconductor Department at FPT University and partnered with firms like Silvaco and LandingAI to enhance production capabilities and high-quality workforce training. Additionally, the government has implemented tax and land incentives to attract foreign investment and build specialized infrastructure for the semiconductor industry. Despite challenges, these efforts are laying the groundwork for Vietnam to develop a comprehensive semiconductor ecosystem and become a regional technology hub.
Furthermore, FPT has initiated projects with partners from Taiwan and the U.S. to strengthen Vietnam’s semiconductor manufacturing ecosystem, helping reduce reliance on international supply chains. The development of the semiconductor industry is not only a government priority but also a collaboration between the state and private enterprises like FPT. While Vietnam has not fully overcome all difficulties, the combined efforts of businesses and the government are making significant progress in advancing production capacity and workforce training, moving towards building a complete semiconductor ecosystem.
The efforts of Vietnamese businesses and the government to improve
The Vietnamese semiconductor industry is entering a promising development phase, with many opportunities and challenges ahead. Continued efforts to attract investment, improve technology, and enhance workforce quality will shape the future of the industry, helping Vietnam become a key center for semiconductor production and design in the region and globally.
The growth of major companies in Vietnam’s semiconductor industry
The future development forecast for the Vietnamese semiconductor industry shows a positive outlook. According to experts and research organizations, the semiconductor sector in Vietnam could achieve an annual growth rate of 20-25% over the next decade. This growth will be driven by several factors, including increasing demand for high-tech products, the global supply chain shift, and the rising investment from leading technology corporations.
One of the main driving forces behind this development is the boom in information and communication technology, along with the growth of the Internet of Things (IoT) and Artificial Intelligence (AI). These applications require a large volume of semiconductor components and devices, generating high demand for products such as chips, integrated circuits, and other electronic components.
FPT Semiconductor has laid out an ambitious plan to supply 25 million chips to the international market by 2023. After this initial success, FPT aims to expand production to 70 million chips in the following years to meet the growing demand in the semiconductor industry. To achieve this, FPT is focusing not only on the domestic market but also on key international markets like Japan, South Korea, Taiwan, the U.S., and Europe. Through partnerships and advanced manufacturing facilities, FPT ensures high standards of quality and quantity in chip production.
Leveraging its global network and expertise in IT and telecommunications, FPT has built an efficient distribution and marketing system for its chips. This approach not only helps the company increase its market share in the Asia-Pacific region but also reach larger international markets, enhancing Vietnam’s position in the global semiconductor supply chain.
The semiconductor industry in Vietnam is experiencing strong growth, driven by significant efforts from both the government and domestic and international enterprises. Major corporations like Intel Products Vietnam, Samsung, Amkor Technology, Synopsys, and Renesas have launched large-scale investment projects in Vietnam, not only in manufacturing but also in semiconductor research and development. Intel’s factory in Ho Chi Minh City plays a key role in its global supply chain, while Samsung continues to invest heavily in memory chips and semiconductors, demonstrating its long-term commitment to the industry in Vietnam.
Amkor Technology is currently building a semiconductor assembly and packaging plant in Bac Ninh, set to begin operations by 2025, marking a significant step in the industry’s development. Additionally, Vietnam has hosted several important international semiconductor technology events, such as the 2023 Global Semiconductor Technology Forum in Ho Chi Minh City, which brought together experts and leading companies in the sector, fostering collaboration and discussion on both challenges and opportunities.
In particular, partnerships between Synopsys and major universities in Vietnam represent a milestone in training and developing high-quality human resources to meet the increasing demands of the domestic semiconductor sector. These collaborations not only improve the professional skills of students and engineers but also position Vietnam as a future hub for semiconductor design.
Government policies strengthening Vietnam’s semiconductor sector
To realize these growth projections, the role of the government and stakeholders in the semiconductor industry is vital. The Vietnamese government must implement robust support policies to foster the industry’s development. This includes introducing tax incentives, financial support for research and development, and creating a favorable investment environment for domestic and international companies.
The government is pivotal in boosting semiconductor growth through various policies and investment measures. In the context of an increasingly competitive global tech race, the government recognizes that developing the semiconductor industry offers not only economic benefits but also serves as a key factor in ensuring technological security and enhancing national competitiveness. As a result, numerous tax incentives and support programs have been rolled out to attract large investors while encouraging local businesses to participate in the semiconductor supply chain.
One significant measure is the government’s introduction of tax breaks for businesses investing in the semiconductor sector. These incentives include corporate income tax exemptions or reductions for the first few years of operation, reduced import taxes on high-tech machinery and equipment, and financial aid for research and development (R&D) projects. This creates a more attractive investment environment, encouraging major tech companies from the U.S., South Korea, Japan, and Europe to expand production and establish centers in Vietnam.
Additionally, the government has proactively enhanced technological infrastructure and manufacturing facilities to attract semiconductor investments. High-tech zones in Ho Chi Minh City, Da Nang, and Bac Ninh have been designed and developed with favorable conditions for land, modern facilities, and lease incentives. These high-tech zones are home to major corporations like Intel and Amkor Technology, and local companies have the opportunity to develop technologies and produce semiconductor components for the global market.
Another critical factor is the policy for developing a high-quality workforce. The Vietnamese government is focused on fostering collaborations with global tech corporations and international universities to improve the skills of the workforce in the semiconductor industry. Specialized training programs in semiconductor engineering, chip design, and production management are being promoted through partnerships with companies like Synopsys and local universities. Additionally, government scholarships and training support programs aim to enhance the quality of human resources to meet the industry’s rapid growth demands.
The government has also been active in international forums and established strategic partnerships with countries with advanced semiconductor industries. This allows Vietnam to not only learn from the experiences and technologies of these nations but also enables local businesses to access global markets. For instance, Vietnam’s cooperation agreements with the United States in the semiconductor sector mark an important step, creating substantial opportunities for Vietnam to integrate further into the high-tech supply chain.
These efforts from the government have not only opened up opportunities for Vietnam to attract more investments from leading global technology corporations but also laid a solid foundation for the sustainable long-term development of the semiconductor industry. Thanks to effective policies and strategic foresight, Vietnam is gradually affirming its position on the global semiconductor map.
Read more about the Government’s efforts to support businesses here!
Conclusion
The future of the Vietnamese semiconductor industry is projected to be very bright, with many development opportunities ahead. However, to realize this potential, close cooperation is needed between the government, businesses, and relevant organizations. Only through collective efforts can the semiconductor industry develop strongly and sustainably, contributing to the overall economic growth of the country.
To update the latest information, do not forget to follow news about the semiconductor industry right at FPT Semiconductor!
————————————————————————
Contact For Us:
FPT Semiconductor – Chip make in Vietnam made by FPT
Email: [email protected]
Linkedln: https://www.linkedin.com/company/fpt-semiconductor/
Facebook: https://www.facebook.com/FPT.Semiconductor
Address: FPT Tower, No. 10 Pham Van Bach Street, Dich Vong Ward, Cau Giay District, Hanoi
#SemiconductorFuture #FPTSemiconductor