According to a report from Economic Daily News, Southeast Asia has emerged as an investment hub for major cloud service providers (CSPs) worldwide. In response, Taiwanese server ODMs such as Foxconn, Quanta, Wiwynn, and Inventec are actively expanding their production capability in the region to meet the growing demand for AI servers from international CSPs and secure more orders by producing locally.

The report indicated that, for example, leading server ODM Foxconn has facilities in Taiwan, Vietnam, Thailand, Indonesia, and Malaysia. Taiwan and Vietnam serve as the two primary production bases for servers. Thailand mainly focuses on electric vehicle assembly, while Indonesia primarily manufactures electric vehicle components, and Malaysia mainly produces semiconductor-related products.

On the other hand, Ingrasys’s Taoyuan NanChing factory, a subsidiary of Foxconn, primarily produces AI servers, high-speed computing accelerators, and cloud storage products, according to the report citing industry sources. The Taoyuan NanChing factory has been recognized as the world’s first AI server lighthouse factory for leveraging AI to significantly enhance production efficiency, and NVIDIA GPU modules are produced automatically in the NanChing factory, as noted in the report.

As for Foxconn’s Vietnam factory, with the expansion of Foxconn Industrial Internet (Fii) in the local area, it has also become one of the major centers for server production, according to the report.

Another Taiwanese server ODM that has expanded its production in Southeast Asia is Quanta. The report noted that Quanta’s server factories are primarily located in Taiwan and Thailand. In August of this year, the company announced plans to invest 850 million baht (approximately USD 25 million) to expand its factory in Thailand, aiming to enhance server-related production capability in response to strong customer demand.

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• [News] Vietnam’s Opportunities and Challenges as the Next Semiconductor Hub amid Geopolitical Tensions
• [News] Google to Invest USD 2 Billion in Malaysia, Focusing on Data Centers and AI

(Photo credit: Foxconn)

Vietnam recently announced its national strategy for developing its semiconductor industry. According to a report from the Diplomat, this plan focuses on gradually building local expertise and integrating the country into the assembly, packaging, and testing (APT) stages of the semiconductor value chain, signaling its long-term goal of becoming a leading global semiconductor hub.

According to the report, the success of Vietnam’s plan relies on how the country uses its geo-economic strengths. The report pointed out that there are some significant advantages.

First, Vietnam’s political environment is relatively stable and predictable compared to some of its regional peers, as the report mentioned. The country is not prone to abrupt changes in policy or political instability. According to the report, this stability offers a considerable advantage attracting foreign companies seeking to make long-term investments in Vietnam’s semiconductor and technology sectors.

Second, the report notes that major semiconductor hubs like the U.S. and South Korea are projected to face significant labor shortages by 2030, making Vietnam’s youthful population a key advantage. Planned investments in the talent pool will support Vietnam’s development of its semiconductor industry, encompassing areas such as APT, chip design, prototyping, and fundamental research.

Lastly, according to the report, Vietnam maintains strategically neutral diplomatic relations with key players in the global semiconductor industry, enhancing its appeal as a prominent semiconductor hub. Amid geopolitical risks, Vietnam avoids taking sides with major superpowers, allowing it to engage in business with all parties.

The report highlights that the comprehensive strategic partnerships Vietnam has established provide a foundation for deeper business cooperation, as evidenced by a rising number of deals, including Amkor’s increased investment in its APT plan in Bac Ninh, chip design training from Cadence and Synopsys in Da Nang, and the expansion of Marvell’s design operations.

On the other hand, Vietnam still faces challenges in establishing itself as a significant player in the global semiconductor value chain. First, according to the report, despite its neutral diplomatic strategies, Vietnam is under increasing pressure to choose between competing superpowers, particularly China and the U.S.

Other challenges include the competition with countries that are already in the race and implementing similar strategies. The report indicated that India is a major talent hub, whereas Malaysia and Indonesia are ahead in drawing foreign investment.

Lastly, there are greater demands to comply with sustainability standards in the semiconductor industry, as indicated by the report. As there is growing scrutiny over carbon emissions and water usage, Vietnam is also adapting its existing infrastructure. The country is striving to balance its commitments to U.N. climate change targets while expanding its presence in the global semiconductor industry.

In conclusion, the report highlights that Vietnam has the potential to become a major player in the global semiconductor value chain by leveraging its political stability, demographic advantages, and balanced diplomatic relationships. However, the country must also address challenges such as increasing geopolitical tensions, the need to meet sustainability standards, and the necessity for investments in its workforce and infrastructure.

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• [News] Vietnam Plans to Establish Over 20 Semiconductor Plants
• [News] Vietnamese Semiconductor Industry Rising with Projected Investment From Global Giants

(Photo credit: Samsung)

According to a recent article published on the Vietnam Government News website, on September 21, Prime Minister Pham Minh signed Decision No. 1018/QD-TTg, issuing Vietnam’s strategy and vision for the development of the semiconductor industry, with short-term goals until 2030 and long-term projections until 2050.

In this strategic plan, Vietnam outlined five specific tasks and measures, including: (1) Developing specialized chips; (2) Promoting the development of the electronics industry; (3) Developing human resources and attracting talent in the semiconductor field; (4) Attracting investment in the semiconductor sector; and (5) Other relevant tasks and measures.

Goals for 2050: 3 Manufacturing Plants, 20 Packaging and Testing Facilities
Overall, this strategy aims to develop Vietnam’s semiconductor industry through a three-phase roadmap.

Phase 1 (2024-2030):

Vietnam will leverage its geographical advantages and strengths in semiconductor human resources to selectively attract foreign direct investment (FDI), becoming one of the global centers for semiconductor talent. The country aims to build foundational capabilities across the entire semiconductor value chain, including research, design, manufacturing, packaging, and testing.

During this phase, the Vietnamese government plans to selectively attract FDI, with the goal of establishing at least 100 design companies, one small semiconductor chip manufacturing plant, and 10 packaging and testing facilities. The strategy also includes developing specialized semiconductor products for various industries, achieving annual semiconductor industry revenue of over USD 25 billion, with a value-added contribution of 10-15%.

Additionally, the annual revenue of Vietnam’s electronics industry is expected to exceed USD 225 billion, with a value-added contribution of 10-15%. The workforce in the semiconductor sector is projected to surpass 50,000 engineers and university graduates, with appropriate structure and quantity to meet development needs.

Phase 2 (2030-2040):

Vietnam aims to become one of the global centers for the semiconductor and electronics industries, combining self-reliance with foreign direct investment to promote industrial development.

During this period, Vietnam will continue to combine domestic self-reliance with FDI to further develop its semiconductor industry. The goal is to establish at least 200 design companies, 2 semiconductor chip manufacturing plants, and 15 packaging and testing facilities. The country will gradually achieve autonomy in specialized semiconductor product design and production.

At the same time, annual semiconductor industry revenue is expected to reach over USD 50 billion, with a value-added contribution of 15-20%. The annual revenue of the electronics industry is projected to exceed USD 485 billion, with a value-added contribution of 15-20%. The workforce in the semiconductor industry is expected to grow to over 100,000 engineers and graduates, with an appropriate structure to meet development needs.

Phase 3 (2040-2050):

Vietnam plans to become one of the leading countries in the global semiconductor and electronics industries and to master research and development methods in these fields.
During this phase, Vietnam plans to establish at least 300 design companies, three semiconductor chip manufacturing plants, and 20 packaging and testing facilities, with the goal of mastering semiconductor research and development. The country aims to achieve annual semiconductor industry revenue exceeding USD 100 billion, with a value-added contribution of 20-25%.

The electronics industry’s annual revenue is expected to surpass USD 1.045 trillion, with a value-added contribution of 20-25%. Vietnam’s semiconductor workforce will be structured and scaled appropriately to meet development needs, while the country will work to further refine its semiconductor ecosystem, enabling greater autonomy and leadership in certain stages of the production chain.

Conclusion

In recent years, Vietnam has attracted significant investment from global semiconductor giants, achieving considerable success. Companies such as Samsung Electronics, Intel, ASE, Amkor, Texas Instruments, NXP, ON Semiconductor, Qualcomm, Renesas Electronics, Marvell, Infineon, and Synopsys have all invested in Vietnam.
Vietnam has designated semiconductors as one of nine national-level products and listed the sector as a key industry for national development over the next 30-50 years. Despite the government’s confidence in its semiconductor development strategy, it faces challenges such as power shortages, competitive salaries for talent, and a weak technological foundation.

(Photo credit: Samsung)

According to The Hindu, India, under a transformative partnership with the U.S., is set to establish its first national security semiconductor fabrication plant. This facility will produce chips for military hardware in both nations, as well as for critical telecommunications and electronics networks.

The ambitious project was announced following talks between Prime Minister Narendra Modi and U.S. President Joe Biden in Wilmington on September 21. The two leaders hailed this first-ever India-U.S. semiconductor fabrication collaboration as a “watershed moment,” according to a joint fact sheet.

Based on a report by Bloomberg, the planned India-U.S. semiconductor plant will manufacture infrared, gallium nitride, and silicon carbide semiconductors. In a joint statement, both sides indicated that the India Semiconductor Mission, along with the strategic technology partnership between Bharat Semi, 3rdiTech Inc, and the U.S. Space Force, will provide support for the establishment of the plant.

Meanwhile, Vietnam is also ramping up efforts to develop its semiconductor industry, having set a development blueprint for 2030 with a vision extending through 2050.

As reported by Vietnam Plus, the country plans to capitalize on its geopolitical advantages and labor market strength to selectively attract foreign direct investment (FDI) in the semiconductor sector during the first phase, from 2024 to 2030.

Vietnam aims to become a global hub for semiconductor talent by strengthening its capabilities across the entire supply chain, from research and design to manufacturing, packaging, and testing.

The Vietnamese government has set an ambitious goal of training 50,000 engineers by 2030 to support this high-tech industry. In the second phase, from 2030 to 2040, Vietnam plans to further integrate with global semiconductor and electronics industries, becoming a key global center. By the third phase, from 2040 to 2050, Vietnam aspires to be a global leader in semiconductors and electronics, advancing its research and development capabilities.

By the end of this period, Vietnam aims to build a self-sufficient semiconductor ecosystem, securing a leading position in various steps of the global supply chain.

(Photo credit: Samsung)

Per a report by the Vietnam News Agency, Vietnamese Prime Minister Phạm Minh Chính recently signed Government Decree No. 791/QĐ-TTg on the establishment of the National Steering Committee for Semiconductor Industry Development.

The main tasks and functions of the steering committee include assisting the Prime Minister and the government in researching, guiding, and coordinating the resolution of important and cross-departmental matters related to promoting the development of Vietnam’s semiconductor industry; researching, consulting, and advising on directions and solutions to promote the industry’s growth; and guiding the coordination among various departments, government agencies, relevant organizations, and entities to vigorously advance the development of Vietnam’s semiconductor industry.

Semiconductor industry is one of the strategically important global industries, and it undoubtedly represents a significant development opportunity for Vietnam.

It is reported that the semiconductor, as one of Vietnam’s nine national-level products, has been included in the country’s key development priorities for the next 30 to 50 years.

According to its National Semiconductor Industry Strategy, Vietnam aims to become a global center for semiconductor chip design, packaging, and testing by 2030.

To achieve this goal, the Vietnamese government has introduced a series of preferential policies and incentives to encourage foreign enterprises to invest in the country.

Moreover, the government has established the National Innovation Center (NIC) to create a high-tech ecosystem and beef up the training of professionals to meet the needs of developing semiconductor industry.

Currently, Vietnam has drawn in investment from foreign enterprises such as Intel, ASE Group, Samsung Electronics, Amkor, Qualcomm, ONSemi, Renesas, Texas Instruments, NXP, Marvell, Synopsys, Hana, and Anpei. In fact, with global capital investment, Vietnam’s semiconductor industry ecosystem is gradually taking shape in recent years.

Vietnam’s Minister of Planning and Investment Nguyễn Chí Dũng stated that Vietnam boasts some conditions and factors conducive to the development of semiconductor industry, involving a stable political system, a favorable geographical location, and attractive investment incentive policies.

The Vietnamese government has been committed to developing semiconductor industry and hopes to attract more and more large enterprises to invest in Vietnam.

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• [News] Nvidia CEO Visits Vietnam, Plans to Establish Chip R&D Base

(Photo credit: Intel)