Vietnam's Three-Pronged Strategy to Dominate the Semiconductor Industry

Prime Minister Pham Minh Chinh recently engaged in discussions with global businesses in Davos, Switzerland, focusing on artificial intelligence, automotive technology, semiconductor chips, and related ecosystems. Vietnam has attracted major semiconductor corporations like Intel, Samsung, Amkor, Qualcomm, Infineon, Marvell, and Hana Micron. 

The global chip market is projected to continue robust growth in 2024, with a forecasted 13% increase in global revenue to $588 billion. Vietnam sees favorable conditions to boost semiconductor activities, emphasizing its three-stage involvement in the semiconductor value chain: design, manufacturing, and packaging. The country is concentrating on developing information technology infrastructure, skilled workforce, and implementing suitable incentives. 

To achieve its goals, Vietnam plans to enhance strategic breakthroughs, including strategic infrastructure development to reduce logistics and input costs, high-quality workforce training, and refining the institutional framework for business facilitation.  

The government is set to release a Semiconductor Industry Development Strategy and a plan to train 50,000 semiconductor engineers, promoting collaboration between domestic and foreign enterprises. 

The European Chamber of Commerce in Vietnam (EuroCham) emphasizes the importance of integrating sustainability into supply chain monitoring and implementing secure digital mechanisms to protect intellectual property. EuroCham also calls for partnerships with educational institutions to ensure a skilled workforce that can adapt to the semiconductor industry's evolving needs. 

With the global minimum tax in effect, foreign companies prioritize overall incentives and comprehensive support, including infrastructure and workforce. Intel's National Director in Vietnam, Phung Viet Thang, emphasizes that investors consider a country's overall policies, including labor, taxes, and infrastructure, to decide on investments.  

Maintaining a modern and business-aligned policy is crucial for Vietnam to expand its position in the global semiconductor supply chain and compete with regional counterparts like Malaysia and Thailand to become a global chip manufacturing hub.