On September 21, 2024, Vietnam’s Prime Minister Pham Minh Chinh unveiled a comprehensive strategy to position the nation as a key player in the global semiconductor market. The strategy focuses on both immediate and long-term goals, signaling the country’s ambitions in a sector that is increasingly vital for technology and economic development.
The strategic plan outlined in Decision No. 1018/QD-TTg aims to place Vietnam in a competitive position within the semiconductors industry, emphasizing five primary objectives. These include developing specialized chips, fostering a robust electronics industry, enhancing human resources and talent acquisition, attracting significant foreign direct investment (FDI), and implementing various supportive measures.
A Three-Phase Development Roadmap
The Vietnamese government has designed a three-phase approach to realize this vision.
Phase 1 (2024-2030): The first phase focuses on leveraging Vietnam’s geographical advantages and existing talent in the semiconductor field. The ambitious goals for this period include establishing at least 100 semiconductor design companies, launching one small semiconductor manufacturing plant, and setting up ten packaging and testing facilities. This phase aims to generate over USD 25 billion in annual revenue from the semiconductor industry, with expectations of increasing the workforce to over 50,000 engineers and university graduates.
Phase 2 (2030-2040): As Vietnam builds on its foundational achievements in the first phase, the second phase aims to enhance the country’s stature as a global hub for semiconductor production. This involves the establishment of 200 design companies, two manufacturing plants, and 15 testing and packaging facilities. By the end of this phase, the industry’s revenue is projected to exceed USD 50 billion, and the workforce to grow to over 100,000 trained professionals.
Phase 3 (2040-2050): The final phase aims for Vietnam to be a leading player in the global semiconductor landscape. This includes the ambition to house at least 300 design companies, three manufacturing plants, and 20 packaging and testing centers. The expected revenue by this point could exceed USD 100 billion annually, while the broader electronics sector is anticipated to surpass USD 1.045 trillion.
Challenges to Overcome
Despite these ambitious targets, several challenges could hinder Vietnam’s semiconductor aspirations. Among the most significant is the issue of power shortages that can affect manufacturing operations. Furthermore, attracting and retaining skilled talent may prove difficult due to competitive salary pressures and the evolving technological landscape. A balanced approach to developing the necessary infrastructure and technology is crucial for the realization of these ambitious plans.
Vietnam’s strategic vision reflects a broader trend in global semiconductor production, where countries increasingly recognize the strategic importance of localizing supply chains in response to geopolitical tensions and market demands. The country’s initiative is pivotal for its economic growth, aiming not only for a thriving semiconductor industry but also for positioning itself as a major player in the global electronics supply chain.
This strategy can also have significant implications for Vietnam’s economy, creating new jobs and boosting exports. As the world continues to digitalize, the demand for semiconductors is expected to surge, underscoring the importance of Vietnam’s timely intervention in this critical industry.
In summary, Vietnam’s efforts to assert itself in the semiconductor market represent a significant move towards enhancing its technological capabilities and economic resilience. By focusing on infrastructure development, workforce training, and attracting investment, Vietnam is poised to make substantial strides in the years to come.