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Last year, Vietnam’s Prime Minister Pham Minh Cinch traveled to Silicon Valley. He toured with officials from semiconductor firms such as Synopsys and Nvidia. This coming after Pham had assigned four government ministries with the goal of increasing the number of engineers able to work within semiconductor design and production across Vietnam, aiming to educate tens of thousands of engineers for this task.
This year, the Minister of Science and Technology, Huynh Thanh Dat, has implemented tax incentives for high value-added products including semiconductors. It highlights a desire to welcome a wave of investment and collaboration in conjunction with other local government ministries and foreign investors. All with the aim of funding and expediting research and to draw new talent to the semiconductor sector, and eventually become a leading player in the global supply chain.
Vietnam along with a contingent of other nations recognize the need to de-risk from China amid intensifying geopolitical tensions. The Southeast Asian nation appears to so far have been making good early progress in terms of its bid to rival the dominance of Taiwan and South Korea. However, it appears there are certain obstacles for Vietnam to overcome if they wish to make a significant and sustained push towards achieving their goals. Such obstacles include a very limited pool of skilled labor, as well as energy insecurity within the country’s tech manufacturing facilities located in the north.
Le Hong Hiep, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore and a former official at Vietnam’s Ministry of Foreign Affairs, stated that aligning with global efforts to diversify semiconductor supply chains resonates with Hanoi’s development objectives. According to Hiep, the semiconductor sector is regarded as pivotal for Vietnam’s economic transformation, aiming to elevate it into a developed and high-income nation by 2045.
During an early December visit to Hanoi, Nvidia’s co-founder and CEO Jensen Huang referred to Vietnam as the chip giant’s “second home” as reported by local media. He pledged to enhance partnerships with local firms and establish a presence in the country. Nvidia, with a market capitalization exceeding $2 trillion has disclosed investments of $12 million in Vietnam thus far. Although Vietnam currently boasts around 5,000 semiconductor-trained engineers, the US-ASEAN Business Council suggests the need for as many as 20,000 within the next five years. Nguyen Thanh Yen, a principal engineer at CoAsia SEMI’s Hanoi branch, mentioned that Vietnamese authorities are cognizant of the workforce deficit and are spearheading efforts to train more engineers. “The government is now aggressively planning dedicated programs to boost the number of semiconductor engineers” claims Nguyen Thanh Yen.
Despite the perceived shortcoming of Vietnam as a micro conductor producing hotspot, it has not deterred large amounts of international investment from corporations who seemingly believe in Vietnam’s ability to improve infrastructure, energy security, as well as bolster the workforce with trained engineers. In October, Amkor commenced operations at a $1.6 billion chip factory located in northern Vietnam. Additionally, Marvell disclosed plans to establish a semiconductor design center. South Korean companies are actively participating in this trend. Samsung, the largest investor in Vietnam, revealed its intention to invest $3.3 billion in manufacturing semiconductor components within the country. Hana Micron Vina, specializing in chip packaging and memory products, is in the process of constructing a second factory in Vietnam.
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