On October 29th, the Vietnamese government held the "Vietnam Semiconductor Summit" to gather opinions from global industry experts on the current state of the Vietnamese semiconductor industry, growth opportunities, and workforce development. Global semiconductor company executives, including John Neuffer, president of the US Semiconductor Industry Association, Sitaei Liu, vice president of Qualcomm, a wireless communication semiconductor company, Robert Lee, vice president of Synopsys, a semiconductor design and software developer, and Michael Shin, vice president of Cadence, a semiconductor design automation company, participated in a public dialogue. Simultaneously, the Vietnamese government announced the launch of the "Vietnam Semiconductor Innovation Network" and plans to establish national innovation centers and high-tech parks in Hanoi, Da Nang, and Ho Chi Minh City to attract semiconductor companies. They also pledged to train 50,000 semiconductor professionals by 2030, establishing specialized training facilities and research centers at five universities: Hanoi National University, Ho Chi Minh City National University, Da Nang University, Hanoi University of Science and Technology, and the Vietnam Post and Telecommunications Institute.
In 2012, the Vietnamese government designated the semiconductor industry as a key national project and made significant efforts to attract semiconductor companies. Vietnam clearly recognized that failing to transition from labor-intensive industries that have driven economic growth would lead to a middle-income trap, and declared that the future of Vietnam hinges on the development of advanced technology industries. The Vietnamese government, including the president and prime minister, actively lobbied Samsung Electronics to invest in semiconductor projects. In response, Samsung invested US$850 million (approximately 1 trillion won) in Vietnam in 2021, aiming to begin mass production of FC-BGA, a high-value-added semiconductor substrate, by 2024. FC-BGA is a crucial semiconductor component for the rapidly growing artificial intelligence, data center, and electric vehicle markets.
Intel, a US company, has been a key driver of Vietnam's semiconductor industry. Since establishing its first semiconductor assembly and testing factory in 2010, Intel has invested a cumulative US$1.5 billion (approximately 2 trillion won) in semiconductor packaging and testing. Packaging and testing are fundamental processes in the semiconductor industry. In October, Amkor Technology, the world's second-largest company in this field, completed a US$520 million (approximately 700 billion won) investment in a Vietnam factory and plans further investment of US$1.075 billion (approximately 1.4 trillion won). In September, US President Biden visited Vietnam, elevating bilateral relations to the highest level, and Vietnam secured commitments from the US for semiconductor industry support. In July, US Treasury Secretary Janet Yellen, during a visit to Vietnam, stated in a speech that "US semiconductor support funds should be allocated to Asian countries," mentioning Amkor Technology's investment in Vietnam and indirectly suggesting support for Vietnam. However, Vietnam seeks to attract more advanced semiconductor manufacturing processes.
At the "US-Vietnam Innovation and Investment Summit" held on September 11th, with US Secretary of State Blinken and the Vietnamese Minister of Planning and Investment, Marvell Technology, a US semiconductor design company, confirmed its investment in Vietnam by 2024 and plans to establish a design center in Ho Chi Minh City to train Vietnamese semiconductor professionals. Synopsys, a US semiconductor company already operating in Vietnam, plans to relocate its engineering training center from China to Ho Chi Minh City and train integrated circuit design and software engineers. Synopsys, which already has offices in Ho Chi Minh City and Da Nang, plans to double its workforce from 400 to 800 employees. According to a Reuters report on October 31st, Vietnam is in contact with GlobalFoundries of the US and PSMC of Taiwan to build semiconductor foundries. Furthermore, in an interview with the Vietnam representative of the US-ASEAN Business Council, Vu Tu Thanh, the Vietnamese government stated that it has met with fab operators and six US semiconductor companies, aiming to establish the first Vietnamese semiconductor factory within 10 years.
Despite Vietnam's aggressive pursuit of semiconductor development, concerns remain. At the Vietnam Semiconductor Summit, John Neuffer, president of the US Semiconductor Industry Association, advised Vietnam to focus on packaging and testing, where Vietnam has a strong position. Similarly, Robert Lee, vice president of Synopsys, pointed out the significant financial challenges, stating that building a fab in Vietnam would cost over US$50 billion, requiring Vietnam to compete with the US, EU, South Korea, and China, which are willing to invest US$100-150 billion.
The risk of supply chain concentration in China, exacerbated by the COVID-19 pandemic, and the US-China conflict, which aims to actively hinder China's development, have created an opportunity for Vietnam to attract semiconductor companies. However, this opportunity is not exclusive to Vietnam. Intel's recent decision to withdraw its planned additional US$1 billion investment in Vietnam should be carefully considered. Intel has invested US$7 billion in Malaysia and recently announced plans to invest an additional US$7 billion to establish a high-end 3D semiconductor packaging hub. Intel also plans to build two semiconductor manufacturing plants in Germany with a planned investment of €30 billion, with the German government providing €10 billion in support. The EU is actively implementing incentive policies to expand its semiconductor supply chain in Europe due to supply chain disruptions caused by the COVID-19 pandemic and the Russia-Ukraine war. Intel also plans investments of up to €80 billion in Poland, Ireland, and Italy.
Vietnam needs to attract investment based on its unique strengths. Tax breaks and land lease subsidies are not unique to Vietnam, as other countries offer similar or better incentives. A senior researcher at the Singapore National Electronics Research Institute, with 27 years of experience in the semiconductor industry, advised Vietnam to offer bold incentives within legal frameworks. He emphasized the need to streamline the process for issuing work visas and residence permits for global semiconductor professionals and their families. He also highlighted Vietnam's advantage in carbon taxes due to its significant investment in solar and wind power.