With Intel, 80 percent of the semiconductor chips used in computers around the world are expected to be produced in Vietnam. So what are the prospects of the semiconductor industry in Vietnam? What are the difficulties and solutions in turning Vietnam into a semiconductor hub? Let’s find out more in this week edition of Vietnam in Close-up.
Samsung Display broke ground last year on a 1-billion USD screen production plant, after opening a 2.5-billion USD smartphone assembly centre in Bac Ninh province. Silicon Valley chip maker Intel also launched a semiconductor factory here — the single largest US investment in the country yet. Taiwan's Foxconn Technology Group — a key Apple contractor — makes cameras, computers and other electronic devices in the same province. It is believed that Vietnam is the next emerging destination for investments after China and India.
By the end of May 2015, Vietnamese Prime Minister Nguyen Tan Dung approved the project to build the country’s first chip manufacturing plant in Saigon Hi-tech Park. The plant costs 300 million USD, invested by Saigon Industry Corporation.
The Saigon facility will fabricate 1.8 billion chips a year, earning 90 million USD in revenue. However, even if this project pushes through, it will only provide 9 per cent of the total chip demand in the country. Yearly, Vietnam uses more than 20 billion chips—mostly imported—worth approximately 2 billion USD.
When it comes to hi-tech industry like semiconductors, a lack of skilled workers is Vietnam's chief shortfall.
The Integrated Circuit Design Research & Education Centre (ICDREC), based in Ho Chi Minh City has for now been active in training, research and transferring semiconductor technology. The centre hopes to maximise its design capacities while fixing production limitations.
Compared to other powerhouses like India and China, Vietnam is a latecomer in the semiconductor industry. The status, however, has not prevented the country from shooting to become the next global semiconductor hub. Together with the government preferences, education efforts, the recent TPP trade pact should also help Vietnam attract more high-tech investments like Intel's and push the country up the value chain.
