Vietnam's Journey Towards Establishing a Multibillion-Dollar Semiconductor Industry

Vietnam's Journey Towards Establishing a Multibillion-Dollar Semiconductor Industry

Vietnam is rapidly developing its semiconductor ecosystem, positioning itself to become a significant player in the global supply chain. The U.S. and Vietnam, in their joint announcement of the Comprehensive Strategic Partnership, acknowledged Vietnam’s substantial potential in the semiconductor industry and expressed support for its rapid growth.

To foster this growth, initiatives are underway to cultivate human resources in the semiconductor sector. The U.S. has offered an initial seed fund of $2 million, with future investments expected from the Vietnamese Government and the private sector. These endeavors mark Vietnam’s determined steps towards joining the lucrative semiconductor industry, which is valued in the hundreds of billions of dollars and has a global impact.

Recent data from the U.S. Census Bureau reveals a significant surge in chip imports from Vietnam. In February 2023, chip imports increased by 75% to $562.5 million, accounting for an 11.6% market share. Vietnam currently boasts over 5,500 chip design engineers, as reported by the Vietnam Microchip Community.

While Vietnam’s involvement in chip production is primarily focused on packaging, the country is making progress in the chipmaking process. Notably, the Intel factory in Ho Chi Minh City serves as a key producer. However, Vietnam’s participation is currently limited to the final phase before chips enter the market, which holds the least value in the supply chain. According to the Semiconductor Industry Association (SIA), packaging represents only 6% of a chip’s overall value.

Following in Samsung’s footsteps, South Korean chip design firms are establishing their presence in Vietnam. Companies like CoAsia Electronics Corp. in Hanoi and Amkor Technology, Inc. in Bac Ninh Province are among those expanding their operations in the country.

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