As global demand for advanced technology continues to surge, Vietnam is being targeted as a promising region to become a new "hub" in the semiconductor world.
Vietnam's Semiconductor Industry is Growing at A Faster Pace than the World's
Amidst the global economic landscape entering a recovery phase after a series of crises and geopolitical conflicts, the semiconductor industry is gradually showing a resurgence with positive records.
Some global semiconductor industry statistics
As chip demand thrives worldwide, the semiconductor industry is predicted to
- Reach US$613.10bn in revenue in 2024
- Bloom at an annual growth rate (CAGR 2024-2027) of 6.30%
- Demand for an additional more than 1 million skilled personnel by 2030
(According to Statista’s research about the Global Semiconductor Market)
Amidst the tensions of the US-China tech war, especially in the field of chip design and production, FDI enterprises are tending to shift investments to developing countries. Among them, Vietnam is considered the most promising candidate, given its stable political environment. According to Statista's research on Vietnam's semiconductor industry in 2024:
- Projected to reach ~US$20 billion in revenue in 2024
- Expected to meet annual growth rate (CAGR 2024-2027) of 9.62%, growing at a faster pace compared to worldwide
- Predicted to reach US$26.20 billion in market size in 2027
Factors contributing to the attractiveness of Vietnam's potential semiconductor industry
According to a 2023 report by the Ministry of Information and Communications, Vietnam ranks third in Asia and is among the top countries in chip exportation growth to the United States. So, what potential does Vietnam possess to become an “ideal" investment destination for semiconductor enterprises, elevating its position on the global semiconductor map?
1- Rare Earth Resources
Not only blessed by nature with plenty of natural resources but also Vietnam ranks second globally in rare earth reserves, a strategic resource for semiconductor production.
Rare earth elements play a crucial strategic role in semiconductor manufacturing, driving the development of strategic industries such as electronics, superconducting materials, photonics, etc.
With 22 million tons of rare earth reserves primarily concentrated in the Central Highlands region (according to data from the US Geological Survey), Vietnam currently holds nearly 18.5% of the world's rare earth reserves, totaling 120 million tons. Once efficient management of these resources is achieved, the semiconductor industry in Vietnam could access numerous development opportunities, opening doors for cooperation, integration, and further involvement in the global semiconductor supply chain.
2- Abundant and Quality Human Resources
In addition to rare earth resources, Vietnam also boasts an advantage in its abundant and youthful workforce, with a labor force participation rate of nearly 70% of the population. This youthful workforce is readily accessible to scientific and technological advancements, driving the growth of high-tech industries.
With a view to cultivating a high-quality semiconductor workforce to ensure continuous supply, Vietnam is focusing on talent development through investments in education and training programs, collaborating with semiconductor enterprises and educational institutions to equip individuals with the necessary skills
Moreover, the technical competence of Vietnamese semiconductor engineers is highly rated internationally:
- Enthusiastic - Eager to Learn - Diligent
This is the assessment from Mr. Robert Li, Vice President of Synopsys (USA) in the Taiwan (China) and South Asia region, regarding the team of Vietnamese semiconductor engineers.
- Infineon is aiming to expand its workforce in Vietnam, employing "multiple hundreds" of specialized engineers.
This was shared by Mr. Chua Chee Seong, President of the Asia-Pacific region of Infineon (a leading semiconductor manufacturer in Europe) with Nikkei Asia.
Recently, Vietnam has witnessed an increasing number of investments from major semiconductor corporations worldwide, including leading U.S. firms such as Intel and Synopsys, South Korean conglomerate Amkor, and Europe's Infineon. This shows a “golden” opportunity for Vietnamese chip designers to “step onto the international stage”, affirm their talent, continue enhancing their professional expertise, and make a mark on the global semiconductor map.
3- Government Focus on Semiconductor Investment and Development, with Attractive Support Incentives
Amidst U.S.-China tensions in the semiconductor industry, semiconductor “great nations" are diversifying their supply chains to minimize risks of disruptions caused by this conflict.
Maintaining a close relationship with effective diplomatic policies with countries worldwide, stable political and economic conditions, Vietnam has recently attracted investment flows from various countries and global semiconductor giants.
The Vietnamese government has implemented a series of supportive measures, continuously improving legal frameworks, tax policies, facilitating investment procedures, and building robust infrastructure, creating a favorable development environment for semiconductor companies, aiming to attract foreign investment.
Here are some statements of various global semiconductor leaders:
- "We want to partner with big information technology companies in Vietnam, such as FPT, to establish an ecosystem for semiconductor manufacturing."
- Said Yoshitaka Kitao, CEO of SBI Holdings.
- "Vietnam is among the top priorities in Renesas’ foreign investment strategy”
- Spokesperson of Renesas Electronics, a leading Japanese semiconductor manufacturer, investing in R&D facilities, with over 1,500 Vietnamese employees.
- “Vietnam is the most attractive destination for American investors in the semiconductor industry and could play the role of a strategic partner supplying labor."
- Said John Neffeur, SIA (Semiconductor Industry Association) President
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