Vietnam's Semiconductor Industry Policy Launched, Benefiting the Chip Industry's Development

A chip, also known as a microchip or integrated circuit, is a microelectronic circuit made by integrating a large number of tiny electronic components (such as transistors, resistors, capacitors, etc.) onto a single semiconductor substrate.

Chips include products such as analog chips, digital chips, and memory chips, which are core units in modern electronic devices and computing systems. In recent years, with the continuous development and iteration of the consumer electronics market, the advancement of new technologies such as cloud computing, the Internet of Things (IoT), and industrial IoT, as well as the automotive industry's electronic and intelligent transformation, the global chip market has continued to show positive growth, and the chip industry is continuously evolving.

Vietnam: An Ideal Destination for Semiconductor Industry Investment

Vietnam has become one of the ideal destinations for semiconductor industry investment. According to the "2024-2028 In-Depth Research and Analysis Report on Vietnam's Chip Market" published by the Newthink Industry Research Center, in recent years, global semiconductor companies have gradually shifted to Vietnam, with companies like Intel, Amkor, Hengnuo Microelectronics, and Synopsys establishing operations in the country. This has fueled the development of Vietnam's domestic semiconductor industry, forming an industry structure dominated by foreign enterprises and supported by local companies. Vietnam's domestic semiconductor industry system is beginning to take shape, and the formation and improvement of the semiconductor industry have laid a strong foundation for investment and development in Vietnam's chip industry.

At the same time, the Vietnamese government is actively encouraging the development of the semiconductor industry and has introduced several policies, such as the "Vietnam Semiconductor Microchip Industry Development Strategy Draft" and the "Vietnam Semiconductor Industry Development Strategy." These policies clearly define the semiconductor industry as one of the key sectors for the country’s development over the next 30-50 years. The policies also emphasize that, in the early stages of promoting semiconductor industry development, Vietnam should leverage its geographical advantages and semiconductor industry human resources to selectively attract foreign direct investment, while strengthening the basic capabilities across various stages of the semiconductor industry.

Additionally, the Vietnamese government is drafting a "Semiconductor Industry Human Resources Development Proposal," which focuses on increasing the national budget to support the training of talent for the semiconductor industry, particularly in cultivating more chip design engineers. Currently, more than 30 universities in Vietnam offer related programs, and the government has established a National Innovation Center. The Ministry of Information and Communications is actively promoting the semiconductor development strategy and strengthening talent cultivation. It is foreseeable that the number of professionals in the semiconductor and chip fields in Vietnam will continue to rise, benefiting the growth of the chip industry.

Vietnam's Semiconductor Industry Development Strategy Approved by Prime Minister

On September 22, according to the Vietnam Government News Portal, the Prime Minister of Vietnam, Pham Minh Chinh, issued Decision No. 1018/QD-TTg regarding the approval of the Vietnam Semiconductor Industry Development Strategy (short-term until 2030 and long-term outlook until 2050). This strategy outlines the development path for Vietnam's semiconductor industry from the present until 2030, with long-term projections extending to 2050.

According to the report, Vietnam plans to initially attract foreign investment, enhance the semiconductor industry's foundational capabilities and human resources, and gradually become one of the global semiconductor and electronics industry centers. Ultimately, Vietnam aims to become a leading country in the semiconductor and electronics industries by 2040-2050, mastering semiconductor and electronics R&D methodologies.

The strategy divides the development of the semiconductor industry into three stages, with specific goals for each phase.

First Phase (2024–2030):

Specific goals include:

• Establishing at least 100 design companies, 1 small semiconductor chip manufacturing plant, and 10 semiconductor product packaging and testing plants.
• Developing specialized semiconductor products for multiple industries.
• Achieving annual revenue of over $25 billion for the semiconductor industry, with a value-added rate of 10%-15%, and achieving annual revenue of over $225 billion for the electronics industry, with a value-added rate of 10%-15%.
• Growing the semiconductor industry's human resources to over 50,000 engineers and university graduates.

Second Phase (2030–2040):

Specific goals include:

• Establishing at least 200 design companies, 2 semiconductor chip manufacturing plants, and 15 semiconductor product packaging and testing plants, gradually achieving specialization in semiconductor product design and autonomous production.
• Achieving annual revenue of over $50 billion for the semiconductor industry, with a value-added rate of 15%-20%, and achieving annual revenue of over $485 billion for the electronics industry, with a value-added rate of 15%-20%.
• Growing the semiconductor industry's human resources to over 100,000 engineers and university graduates.

Third Phase (2040–2050):

Specific goals include:

• Establishing at least 300 design companies, 3 semiconductor chip manufacturing plants, and 20 semiconductor product packaging and testing plants, mastering semiconductor R&D.
• Achieving annual revenue of over $100 billion for the semiconductor industry, with a value-added rate of 20%-25%, and achieving annual revenue of over $1.045 trillion for the electronics industry, with a value-added rate of 20%-25%.
• Developing an appropriate structure and number of human resources to meet the growth needs of the semiconductor industry.
• Improving Vietnam's semiconductor industry ecosystem to enable it to be self-sustaining and occupy an advantageous position in certain stages and links of the production chain.

Based on these goals, the strategy also proposes five tasks and specific measures, including developing specialized chips, promoting the development of the electronics industry, developing human resources and attracting talent in the semiconductor field, and attracting investment in the semiconductor sector.