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[News] Vietnam’s Semiconductor Strategic Positioning by the US and South Korea
Report to Liberty Times Net, In a joint statement on the comprehensive strategic partnership between the United States and Vietnam, the two countries highlighted Vietnam’s significant potential to become a key player in the semiconductor industry. The United States expressed its support for the rapid development of Vietnam’s semiconductor ecosystem. To foster the development of human resources in the semiconductor industry, the United States will provide a $2 million seed fund, with future investments coming from the Vietnamese government and the private sector. These initiatives are seen as a significant step forward for Vietnam in its journey to join the global semiconductor industry.
U.S. census data showed semiconductor imports from Vietnam surged by 75% to $562.5 million in August compared to the same period last year, capturing approximately 11.6% of the market share. However, experts point out that considering the entire supply chain, Vietnam’s contribution remains relatively small.
Semiconductor manufacturing involves three fundamental stages: design, fabrication, and packaging. Since Intel’s Ho Chi Minh City factory is its primary production facility, Vietnam is primarily involved in the final packaging stage of semiconductor production, which represents the lowest value-added segment of the supply chain. According to data from the Semiconductor Industry Association (SIA), packaging accounts for only 6% of the chip’s value. Additionally, Korean semiconductor design companies are following Samsung’s lead by establishing factories in Vietnam, including CoAsia in Hanoi and Amkor in Bac Ninh province.
Shortage of Engineers in Vietnam Poses a Major Challenge
A shortage of packaging and design engineers poses a significant challenge for Vietnam. The country lacks the capacity for domestic semiconductor manufacturing. Currently, Vietnam has over 5,500 semiconductor design engineers, while Intel’s Ho Chi Minh City factory has shipped over 3 billion chips to date. The supply chain ecosystem of American giants is gradually taking shape in Vietnam. However, with just over 5,000 engineers, Vietnam remains a distant bridge to this multi-billion-dollar industry.
Vietnam faces two choices for industry growth: expanding its manufacturing sector or enhancing skills and value in the design and packaging phases. Experts suggest that Vietnam has chosen the latter. However, the shortage of personnel poses a barrier to Vietnam’s ambitions to increase the value of its semiconductor supply chain.
According to estimates, the semiconductor industry needs to cultivate 10,000 engineers annually, but Vietnam’s current rate is less than 20%. In fact, according to a report by the Vietnam Microchip Association, the number of engineers only increases by about 500 people each year. Currently, most of Vietnam’s semiconductor engineers work for foreign companies.
