Vietnam – A prime destination for the Semiconductor Industry

New opportunities arise from the visit

US Commercial Counselor to Vietnam, Lynne Gadkowski, mentioned that the establishment of the Comprehensive Strategic Partnership has opened up new opportunities for cooperation between Vietnam and the US in education, clean energy, science, and technology, aiming to build an innovative economy and elevate Vietnam’s position in the global supply chain. The US is currently a comprehensive strategic partner, supporting Vietnam in achieving these goals.

Vietnam is undergoing significant changes and the US is ready to accompany them in this process. “I want to emphasize the importance of the investment environment in Vietnam. In addition to attractive factors such as land, incentives, and skilled labor, access to green technology and clean, green energy is also crucial”, said US Commercial Counselor Lynne Gadkowski.

Recalling her visit to a medical and aviation equipment manufacturing company in Ho Chi Minh City last October, Lynne shared her impression of the company’s closed rooftop solar energy system. According to Lynne, environmental sustainability (ESG) is also a key consideration for US and foreign investors when choosing partners.

In addition, US President Joe Biden’s visit and the decision to upgrade bilateral relations between Vietnam and the US contribute to the growth of the digital economy. Both sides agree to cooperate in building a safe, reliable, and secure network connection, managing users’ data effectively, and collaborating in the development of AI and 5G technologies.

“Overall, Vietnam has a clear vision and strong political commitment to innovation, particularly in the semiconductor industry. The seeds have been planted in fertile ground, and the next step is to nurture robust trees. That is the commitment and aim of both the Vietnamese and US governments”, emphasized US Commercial Counselor to Vietnam Lynne Gadkowski.

Manufacturing electronic circuit boards at Katolec Vietnam Co., Ltd., Quang Minh Industrial Park, Hanoi. (Photo: kinhtedothi.vn)

Increased presence and cooperation in the semiconductor sector

Lynne Gadkowski mentioned that the recent Covid-19 pandemic has laid bare the challenges faced by the global supply chain, particularly in relation to semiconductors.

Highlighting the cooperation potential in this field, Lynne Gadkowski mentioned Amkor Semiconductor Group’s investment of USD 1.6 billion in Bac Ninh province, announced last October. The presence of such large-scale enterprises can enhance Vietnam’s contribution to the global supply chain.

Lynne Gadkowski also emphasized that the US and Vietnamese authorities are working closely together to develop Vietnam’s National Semiconductor Strategy, with inputs from American research centers and experts. Completion of the strategy will provide a clearer vision of Vietnam’s future in this field”, said the US Commercial Counselor.

Kim Huat Ooi, Vice President and General Director of Intel Products Vietnam Co., Ltd., stated that in the context of global industrialization and modernization, semiconductor chips are now crucial for all countries in the production of electronic devices and components. Referring to the establishment of the Vietnam-US Comprehensive Strategic Partnership during President Biden’s recent visit, Kim affirmed that Vietnam will have more opportunities to attract foreign direct investment in the semiconductor field.

Human resources play a vital role

Human resources are a challenge faced by many countries in the development of the semiconductor market, and Vietnam is no exception. Sharing her visit to Ho Chi Minh City last month, Counselor Lynne Gadkowski noted that while the manufacturing unit she visited had been growing at a rate of 50% per year, the workforce had only increased by 15%, highlighting the challenge in the semiconductor labor market.

The US and Vietnam are discussing cooperation in STEM education and English training for mid-level and technical professionals. The US Agency for International Development (USAID) is also collaborating with the Vietnamese Ministry of Industry and Trade and the Ministry of Planning and Investment on additional cooperation policies. “Furthermore, businesses and investors globally attach great importance to markets that ensure compliance with labor standards to prevent human trafficking and child labor abuse, and to ensure a clean supply chain”, said Lynne Gadkowski.

Regarding human resources, Kim commented that while Vietnam has a high number of individuals with bachelor’s degrees, there is still a lack of professionals with higher qualifications such as master’s and doctorate degrees, which are required in research and development fields.

Building a solid foundation for Vietnam’s progress

Many foreign companies recognize Vietnam as an attractive destination due to its stable socio-political system, young and highly educated workforce, and strategic location in the center of Asia with access to key trade routes and shipping channels.

To further leverage its strengths, Intel representative suggested that Vietnam should promote existing business support programs, particularly preferential tax rates, and modernize incentive programs.

Streamlining administrative procedures, improving infrastructure, and enhancing professional training are also important areas for development in various sectors, including semiconductors. Kim emphasized, “Intel also hopes local leaders empower a one-stop mechanism that expedites decision-making and facilitates direct interaction with investors for sustainable development”.

In reference to Vietnam’s VND 140 trillion investment plan in national electricity development, the Intel Group leader also stressed the importance of infrastructure improvement, such as transportation and electricity. To increase Vietnam’s competitiveness in attracting semiconductor investments, the US Commercial Counselor once again emphasized the need for a robust investment environment. Many other countries have convenient “one-stop” mechanisms dedicated to strategic and high-quality investments. “We hope this is also part of the vision of the Vietnam Innovation Center”, added Lynne.