Semiconductor Industry Development in Vietnam (Part 2): Golden Opportunity

Although lagging behind many countries in the field of semiconductors and microchips, with the world’s second largest rare earth reserves and abundant human resources, Vietnam is considered to have a great opportunity to participate in the global supply chain – a playground that is only for developed or emerging economies. Notably, in the context of fierce strategic competition between major countries, Vietnam is becoming an attractive destination for many “giants” in the global semiconductor industry.

US President Joe Biden during his visit to Vietnam in September. Photo: An Dang/VNA

Pioneering tours

When upgrading the relationship to a Comprehensive Strategic Partnership in September 2023, Vietnam and the United States decided to promote cooperation in science, technology and innovation in the digital field, considering this a new breakthrough of the Comprehensive Strategic Partnership. The United States affirmed its commitment to increasing support for Vietnam in training and developing a high-tech workforce.

In addition, the two sides also recognized Vietnam’s “tremendous potential” as a key player in the semiconductor industry and pledged to work together to improve Vietnam’s position in the global semiconductor supply chain. A joint statement released after talks between General Secretary Nguyen Phu Trong and US President Joseph R. Biden Jr. in Hanoi on September 10 said: “Recognizing Vietnam’s great potential to become a key player in the semiconductor industry, the two leaders supported the rapid development of the semiconductor ecosystem in Vietnam and the two sides will actively coordinate to enhance Vietnam’s position in the global semiconductor supply chain.”

Speaking at a press conference after the talks, President Biden affirmed: "We will strengthen cooperation in critical and emerging technology areas, especially in building a more resilient supply chain for the semiconductor industry."

Along with the upgraded relationship, Vietnam and the United States announced the launch of human resource development initiatives in the semiconductor sector, in which the US Government will provide an initial seed grant of $2 million, along with future support from the Vietnamese Government and the private sector.

Also during President Biden's visit to Vietnam, US semiconductor manufacturing companies and their partners in Vietnam - where Intel Corporation currently operates the world's largest semiconductor packaging and testing plant in Ho Chi Minh City - signed a series of important agreements.

More than a week later, on the occasion of attending the High-Level Week of the 78th Session of the United Nations General Assembly and bilateral activities in the United States, on September 19, in Washington, DC, Prime Minister Pham Minh Chinh had a working lunch with leaders of leading businesses and corporations in the US semiconductor sector.

Speaking at the meeting, Prime Minister Pham Minh Chinh said that cooperation in developing the semiconductor industry in Vietnam is in line with the current trend in the world, in line with Vietnam's potential and human resources, and brings benefits to the people, so the people will certainly participate actively and effectively.

The Prime Minister also suggested that US semiconductor enterprises continue to cooperate and invest more deeply, widely and more in Vietnam in all stages such as infrastructure investment; technology transfer, design, production and distribution organization; human resource training with the participation of enterprises and research and training facilities of both countries. This will create conditions to improve the quality of human resources and capacity of Vietnamese enterprises and gradually bring Vietnam deeper into the value chain and supply chain of the global semiconductor industry in many stages from design, assembly, packaging, testing and production.

Not only the US, recently, Japan has also shown interest in cooperating with Vietnam in the semiconductor sector. When the two countries upgraded their relationship to a Comprehensive Strategic Partnership in November 2023 during the official visit to Japan by President Vo Van Thuong and his wife, the two sides pledged to cooperate in developing the semiconductor industry. The joint statement released after the talks between President Vo Van Thuong and Japanese Prime Minister Kishida Fumio in Tokyo on November 27 stated: “Regarding areas such as digital government, digital economy, digital society, and new potential core industries such as semiconductors, the two leaders also affirmed their commitment to cooperate in developing these industries.”

The "big guys" are starting to land

Less than three months after President Biden's visit, Vietnam has welcomed a series of "big names" in the US semiconductor industry.

Specifically, in early December, Mr. John Neffeur, President of the Semiconductor Industry Association (SIA), led a delegation of leaders of leading US semiconductor companies such as Intel, Qualcom, Ampere, ARM... to visit and work in Vietnam.

Prime Minister Pham Minh Chinh receives President of the Semiconductor Industry Association (SIA) John Neuffer. Photo: Duong Giang-VNA

Speaking at a meeting with Prime Minister Pham Minh Chinh in Hanoi on December 7, the SIA Chairman highly appreciated Vietnam's important and impressive steps and changes in the semiconductor sector, becoming a destination and an important factor in the semiconductor supply chain. Particularly appreciating Vietnam's semiconductor human resources in particular and the high-tech sector in general, the SIA Chairman said that the United States is thirsty for semiconductor human resources and since the COVID-19 pandemic, Vietnamese human resources have been an important source of compensation for this shortage.

Mr. Neffeur also affirmed that Vietnam is the most attractive destination for US investors in the semiconductor sector and can play a strategic partner role in providing human resources.

Announcing the results of his work with Vietnamese authorities, Mr. Neffeur said that US businesses are excitedly awaiting Vietnam's National Semiconductor Strategy; believing and hoping that Vietnam will play an even more important role in the global supply chain, quickly taking advantage of new opportunities opening up in this field, especially chip design, which does not require much investment compared to manufacturing.

He said that US businesses are ready to strengthen relations, promote investment and cooperation with Vietnam in semiconductors, especially in training talented and high-quality human resources, contributing to promoting mutually beneficial relations between the two countries.

For his part, Prime Minister Pham Minh Chinh said that in the newly established Comprehensive Strategic Partnership, Vietnam and the United States have agreed to make science, technology, and innovation an important new pillar in the bilateral relationship. Therefore, it is necessary to focus resources and intelligence, and prioritize a number of key areas for Vietnam, especially the semiconductor industry - a field in which Vietnam has a lot of potential and advantages, suitable for the Vietnamese people.

Prime Minister Pham Minh Chinh also revealed that Vietnam is researching and building a Development Strategy, a Human Resource Development Project along with appropriate incentive mechanisms to attract leading foreign semiconductor chip manufacturing, design and development enterprises to Vietnam.

The Prime Minister also asked SIA to urge the US to soon recognize Vietnam's market economy status and abolish unnecessary controls on technology transfer; promote cooperation in technology transfer, research, production, human resource training, construction of laboratories, support Vietnamese enterprises to participate in the US's global semiconductor supply chain, and cooperate in building and perfecting institutions and policies for sustainable development of the semiconductor sector.

Founded in 1977, SIA represents the U.S. semiconductor industry—one of America’s leading export industries and a key driver of U.S. economic strength, national security, and global competitiveness. Today, SIA’s network of member companies accounts for 99% of U.S. semiconductor industry revenue, two-thirds of which are foreign semiconductor companies.

Just a few days later, on December 11, Mr. Jensen Huang, Chairman of NVIDIA Corporation (USA), also came to Vietnam. Speaking at a meeting with Prime Minister Pham Minh Chinh, Mr. Huang said that NVIDIA will build a stronghold in Vietnam in the semiconductor field to attract talent.

Also that day, speaking at a seminar in Hanoi, NVIDIA Chairman Jensen Huang highly appreciated Vietnam's great potential and opportunities in the semiconductor and AI industries, especially Vietnam's human resources in this field, and affirmed that NVIDIA will further expand its existing partnership with Vietnam. NVIDIA is committed to making Vietnam its second home and establishing a legal entity in Vietnam.

According to Mr. Huang, Vietnam has a good education and infrastructure, it just needs to encourage new generations to enter the AI ​​world, encourage Vietnamese experts and engineers abroad to return home. The problem now is to improve skills and build 1 million AI experts. This will be the most powerful team in the world.

“We are ready to cooperate with Vietnam to improve AI skills and infrastructure, NVIDIA President Jensen Huang emphasized./.

Khanh Linh