Semiconductor goals building up steam – Vietnam Investment Review
At last week’s Vietnam Semiconductor Summit, a conference in the launch week of the National Innovation Centre (NIC) in Hanoi’s Hoa Lac High-Tech Park, experts declared Vietnam has all the necessary conditions to develop the semiconductor industry.
John Neuffer, president and CEO of the US Semiconductor Industry Association (SIA), said, “The technologies of tomorrow all depend on semiconductor innovation, including AI, quantum computing, autonomous driving, and 5G and 6G. Vietnam is a crucial link in the global semiconductor supply chain, and it’s poised to become even more important to our industry.”
He was also impressed that Vietnam is developing its own national semiconductor strategy. “I would encourage you to play to your strengths to pull in greater semiconductor investments, for starters by doubling down to draw in more back-end assembly tests,” he explained. “This also means looking to bolster your participation. Everyone wants a brand spanking new $20 billion semiconductor lab in their yard, and that’s a great aspirational goal. But Vietnam has shown itself to have a proven track record in important parts of our supply chain.”
Numerous semiconductor projects have chosen Vietnam as a destination recently. Amkor Technology and Hana Micron have respectively put large-scale semiconductor factories into operation in October and September. Victory Gain Technology Group from China plans to invest in a $400 million project in the northern province of Bac Ninh, and Thai-based Runergy PV Technology has also raised its investment to $440 million in the central province of Nghe An.
Additionally, Marvell has announced the establishment of an integrated circuit (IC) design centre in Ho Chi Minh City. Samsung will produce semiconductor components at its Samsung Electro-Mechanics factory in the northern province of Thai Nguyen. Synopsys, NXP Semiconductors, and Hanmi Semiconductor also have investment and business activities in Vietnam.
The opportunity has become even greater since Vietnam and the US upgraded their relationship and reached cooperation agreements on innovation, including in the semiconductor industry.
During the September trip to the US, PM Pham Minh Chinh met with a series of large corporations in semiconductors, such as Nvidia, Synopsys, which have already made investments and business activities in Vietnam. Synopsys Vietnam alone has opened four offices in Ho Chi Minh City and the central city of Danang with nearly 500 engineers. The PM asked them to open factories setting Vietnam as a manufacturing hub in Southeast Asia, and support the development of the industry in Vietnam.
However, Neuffer of the SIA also raised the challenge of talent shortage across the globe. “Vietnam’s plan to produce 50,000 more chip engineers is absolutely the right objective. And I encourage that be achieved as soon as possible. Competing on talent is a very smart move,” Neuffer said
Seeing the challenge of human resources, the government has assigned the Ministry of Planning and Investment (MPI), the Ministry of Information and Communications, and others to build an action programme to develop this industry.
The MPI has proposed three main pillars to train human resources. The first is university training for high-quality human resources, including engineers, those with PhDs and Masters, the second pillar is training technicians, and the third is to draw in talent from elsewhere.
This will be carried out with the support of Synopsys, a Californian semiconductor design software and security group, providing training licences that include curriculum, educational resources, and other initiatives to the NIC to help set up its chip design incubation centre. Electronic systems design group Cadence will offer access to its tools to academic institutes selected by the NIC, providing students with an opportunity to gain real-world experience creating IC designs.
And Arizona State University will introduce job opportunities for Vietnamese engineers trained at the NIC IC design centre for training and incubation with domestic and foreign businesses in the semiconductor industry, including linkages to Arizona’s large global semiconductor ecosystem.
Minister of Planning and Investment Nguyen Chi Dung believes Vietnam has enough capacity to develop the semiconductor industry, and sees an abundant workforce in engineering and technology related to the industry, and numerous reputable universities and institutes.
“Numerous local large enterprises are willing to cooperate and develop the semiconductor industry, such as Viettel, VNPT, FPT, and CMC,” he said. “Vietnam is committed to making a significant contribution to the innovation ecosystem of the world’s semiconductor industry. In the near future, we believe Vietnam will become a reliable partner and a key link in the global semiconductor manufacturing supply chain.”
Ann Måwe, Swedish Ambassador to Vietnam
Entering the 2020s, Sweden was known as one of the world’s leading innovative nations, as we have been positioned among the top performers in various rankings. We are in first place in the readiness for frontier technology, second in the Global innovation Index and European innovation scoreboard, and third in global digital competitiveness.
Innovation and entrepreneurship go hand in hand. The vibrant Swedish startup scene has attracted international attention. While Stockholm is second only to Silicon Valley in terms of unicorns per capita, the country has minted 35 unicorns as of 2021 and considered as the fifth-largest pool for potential future unicorns.
Swedish companies evolve and adapt to meet societal needs and sustainable development. For centuries, they have experienced a gradual shift from heavy industry to being high-tech and climate-focused.
Sweden places sustainability, and safeguarding the future while conserving the past, on top of its agenda. By fostering innovation, the country comes closer to its goal of creating a sustainable future by finding solutions for complex societal and environmental issues.
Once primarily known as the home of IKEA, Volvo, and Ericsson, the nation has transformed itself into one of the most valued European tech ecosystems in the last decades. This was not an overnight success, but rather a result of several factors combined.
First and foremost is collaboration, which is one of the driving forces of the Swedish ecosystem. This can be seen through the synergy between government, academia, industry, and civil society coming together to foster innovation.
The second aspect is investment for research. Our country is one of the world’s most research-intensive nations. Several of our universities place high in the European rankings, and their research has contributed to the global success of the country’s many high-tech companies.
Last but not least, innovation comes from trial and error, and one must be willing to take risks. Sweden’s safety net of free education and healthcare, together with a significant number of funding schemes, encourages citizens to bring their ideas to life without fear of failure.
There is great potential for Sweden and Vietnam to collaborate. One example is the opening of Bloom, Vietnam’s first-ever global food and beverage (F&B) innovation centre and a joint project between Tetra Pak and DenEast Vietnam. Tetra Pak sees Vietnam’s potential to become a hub for manufacturing for the F&B industry, opening its first factory in the southern province of Binh Duong in 2019.
Marking the 30th anniversary of a transformer factory in the northern province of Bac Ninh, Hitachi Energy’s presence in Vietnam is well-established. As of today, one-third of Vietnam’s wind and solar power is facilitated through Hitachi Energy’s products and solutions.
There is also ABB, a tech pioneer in electrification and automation, which enables a more resource-efficient future with Swedish roots.
Along with green transitioning, Vietnam is also embarking on digital transformation. This summer I had the opportunity to participate in the launch of the AI Lab, an initiative between Ericsson and RMIT University. Ericsson’s contribution to Vietnam’s digital transformation sets a clear example of how Swedish innovation and sustainability enhance Vietnam’s socioeconomic development.
On top of that, the recent establishment of the National Innovation Centre has demonstrated Vietnam’s commitment to leveraging innovation for rapid development.
Trinh Thi Huong, Deputy director general Agency for Enterprises Development, Ministry of Planning and Investment
According to the survey of businesses’ awareness of environmental, social, and governance (ESG) conducted by the Agency for Enterprises Development in 2022, under the technical support from the US Agency for International Development through the Improving Private Sector Competitiveness project, most of the businesses that are pioneering in applying ESG are large ones such as foreign-invested enterprises, listed enterprises, and exporters due to demand from investors, markets, and business partners.
When it comes to SMEs in the midst of growth, the majority of them tend to hold back on taking proactive steps towards implementing ESG practices. However, 83 per cent of surveyed businesses agreed that applying them would enhance the image and reputation of the business, and 57 per cent of them saw the need of ESG adoption beyond a pressure to comply with state regulations. These outcomes partly reflect a fairly high level of awareness and commitment from the business community towards ESG practices.
However, there is a huge gap from awareness and planning to implementation. Therefore, businesses need to proactively start right now. Adopting ESG should not merely follow the requirements of partners, markets, investors, or regulations. It should be leveraged to capture new business investment opportunities, create added value, and enhance competitive advantages for businesses in the near future.
Similar to digital transformation, in the initial stages, businesses are perplexed in answering many questions on the concept, application, and where to start. Therefore, when confronted with new concepts like ESG, Vietnamese firms also grapple with similar uncertainties.
At present, there is a growing emphasis on raising awareness about ESG. Various media outlets and communication channels have been providing further information about ESG and sustainable business trends in general.
To effectively implement and apply ESG, businesses should be supplied with specific knowledge and methods to understand and practice it effectively.
On October 11, after nearly two years of construction, Amkor Technology Vietnam officially inaugurated the world’s largest Amkor factory at Yen Phong 2C Industrial Park in Bac Ninh province with Viglacera Corporation, a major building materials maker and industrial park developer in Vietnam, acting as the developer.
Vietnam is making strong progress in advancing its standing in the global semiconductor supply chain as many of the world’s largest chip manufacturers have landed in the Southeast Asian nation, insiders said.
The semiconductor industry in Vietnam is gaining momentum with many global heavyweights investing, yet there are many challenges, particularly to a shortage of skilled human resources.
The semiconductor value chain is moving to Southeast Asia, and Vietnam has an advantage in the region, so fully welcomes all new opportunities. But unless semiconductor technology is fully mastered, the country will remain on the sidelines of core technology.
The Ministry of Education and Training (MoET) and educational institutions are working to promote the training of human resources for the semiconductor industry, which now has great demand for high-quality manpower.
Many enterprises from the US are planning to make or expand investments in Vietnam, showing their intention to turn the Southeast Asian country into one of their important bases.
By Hara Nguyen
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Vietnam Investment Review under the Ministry of Planning and Investment
Editor-in-Chief: Le Trong Minh
Deputy Editors-in-Chief: Bui Duc Hai, Nguyen Van Hong and Nguyen Quoc Viet
Editorial Board Member: Dang Tuan Khanh
Managing Editor: Nguyen Chi Mai
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