Developing the semiconductor industry in Vietnam (Part 4): Need to soon form a semiconductor ecosystem

Currently, Vietnam is 100% dependent on foreign semiconductor chip supply. Domestic enterprises only participate in the chip design stage, while foreign-invested companies mostly perform chip design, assembly and testing stages. In the context of a series of large corporations in the world "eyeing" Vietnam, we need to soon form a semiconductor and microchip ecosystem to seize these opportunities.

Prime Minister Pham Minh Chinh visits the semiconductor chip production line of Hana Micro Vina Company Limited. Photo: Duong Giang-VNA

Initial Platform

Speaking at the seminar “Infrastructure readiness for the semiconductor industry in Vietnam” in Hanoi on December 7, President of the Semiconductor Industry Association (SIA) John Neuffer said that many SIA member enterprises have made significant investments in Vietnam such as Intel, Marvell, Synopsys, Qualcomm, Ampere, Infineon...

“Many companies are doubling down on their investments. These investments are a testament to Vietnam’s growing and pivotal role in the global semiconductor supply chain,” said John Neuffer.

Indeed, when it comes to investing in the semiconductor industry in Vietnam, one cannot help but mention Intel - one of the three leading chip manufacturers in the world. More than 10 years ago, Intel invested in building a factory in Ho Chi Minh City, with a scale of 1 billion USD. Currently, this factory is Intel's largest assembly and testing site, accounting for more than 50% of the group's total output worldwide. In 2021, Intel increased its investment capital for the project to nearly 1.5 billion USD and is planning to invest more to expand the factory in Vietnam.

Not only Intel, in September 2023, Hana Micron Group (Korea) inaugurated Hana Micron Vina 2 Manufacturing Factory in Van Trung Industrial Park (Bac Giang province). This is Hana Micron's second factory. The first factory was completed and put into operation by Hana Micron in 2022. This is the first semiconductor and chip packaging factory in the North.

Speaking at the event, Mr. Choi Chang Ho, Chairman of Hana Micron, said that the group plans to increase its investment capital from the current 600 million USD to more than 1 billion USD by 2025. At that time, the factory's revenue is expected to reach 800 million USD, creating jobs for more than 4,000 workers.

Notably, Mr. Choi Chang Ho affirmed that Hana Micron wishes to develop a new semiconductor industry ecosystem in Vietnam, contributing to diversifying the types of technology and innovative techniques that Vietnam is pursuing.

Just one month later, on October 11, Amkor Group - a semiconductor business startup in Korea and the US - inaugurated the Amkor Technology Vietnam Factory in Bac Ninh province. Amkor is a global leader in technology and engineering, know-how in the OSAT industry, with thousands of diverse semiconductor products for trusted customers and partners around the world. Amkor Technology Vietnam Factory, specializing in manufacturing, assembling and testing semiconductor materials and equipment, has a total registered investment capital of about 530 million USD in phase I. Amkor has committed to increasing the total investment capital for the factory to 1.6 billion USD from now until 2035.

In addition to Intel, Hana Micron and Amkor, Samsung is preparing to put a production line for semiconductor chip grid products into operation at its factory in Thai Nguyen. Meanwhile, Runergy New Energy Technology Group (Thailand) has invested 440 million USD in Nghe An to produce semiconductor components, including silicon ingots and semiconductor wafers, while Victory Gaint Technology Group (China) also wants to invest in a 400 million USD semiconductor component project in Bac Ninh.

For domestic enterprises, currently only the Military Industry and Telecommunications Group (Viettel) and FPT Group have invested in chip design, while the chip design, processing, assembly and testing stages are mainly performed by foreign corporations.

Step by step formation of semiconductor ecosystem

Semiconductor chips play a key role in creating technological products and components. The task of chips is to allow machines to perform key functions such as control, data processing, storage, etc., so semiconductor chips are indispensable in all current technologies.

Semiconductor chips are important components in electronic devices. Illustration photo: VNA

The Ministry of Science and Technology has identified mastering semiconductor chip design as a top priority in the chip manufacturing value chain because chip design accounts for about 50-60% of the value of chip products. Along with cooperation with other countries, Vietnam has promoted attracting investment from foreign enterprises and corporations to invest in laboratories, research centers, and joint innovation at schools and research institutes, contributing to the strong development of the semiconductor chip industry.

According to Mr. Nguyen Phu Hung, Director of the Department of Science and Technology of Economic and Technical Sectors, the Ministry of Science and Technology has many policies and mechanisms related to the development of semiconductor chips, especially in the training of human resources and attracting technology transfer from abroad. In the coming time, the Ministry of Science and Technology will continue to prioritize the implementation of national science and technology programs related to semiconductor chips.

Furthermore, the Ministry will coordinate with ministries and branches to continue advising the Government and the Prime Minister on implementing the national product program for semiconductor chips. The Ministry of Science and Technology will develop policies on investment and support for equipment for measuring and testing semiconductor chip products that meet ISO/IEC 17025:2017 standards to meet the measurement needs of semiconductor chip design and manufacturing enterprises nationwide.

In addition, the Ministry of Science and Technology will soon propose incentive mechanisms and policies to attract domestic and foreign enterprises and corporations to invest in laboratories, research and innovation centers in institutes and schools with research fields related to semiconductor chips.

On the other hand, the Ministry will promote the strong participation of large domestic enterprises such as Viettel, FPT, CMC... institutes and schools with research related to microchips to participate in the national product development program related to semiconductor chips, thereby creating an ecosystem for semiconductor chip development, especially focusing on semiconductor chip design.

In addition, the Ministry of Science and Technology identifies research and technology transfer as the top priority task, attracting foreign intellectual resources and technology to Vietnam. The Ministry of Science and Technology also encourages Vietnamese scientists and researchers abroad to participate in the development of the semiconductor chip sector in Vietnam.

In the coming time, the Ministry of Science and Technology will promote technology search and transfer programs, bilateral and multilateral cooperation programs with countries with strengths in science and technology, thereby creating strong research groups that can apply and grasp core technologies in this field the fastest.

Mr. Nguyen Phu Hung believes that with the direction of the Ministry of Science and Technology, along with other policies that the Party and Government are directing as well as the drastic participation of ministries and branches, Vietnam can become one of the countries participating in the global value chain of semiconductor chip products.

In an effort to build a semiconductor ecosystem, at the end of October, at the Semiconductor Industry Summit, the Vietnam Semiconductor Network was officially launched. The operation of the Vietnam Semiconductor Network will gradually realize the development orientation of the semiconductor industry, making Vietnam a reliable partner in the regional and global semiconductor ecosystem, thereby enhancing Vietnam's position in the global value chain and modernizing the economy.

Speaking at the launching ceremony of the Vietnam Semiconductor Network, Minister of Planning and Investment Nguyen Chi Dung affirmed: “Vietnam is committed to actively contributing to the innovation ecosystem of the semiconductor industry in the world. In the near future, we believe that Vietnam will become a reliable partner and an important link in the global semiconductor manufacturing supply chain”./.

Khanh Linh