As Vietnam holds great potential for enhancing its presence in the global semiconductor supply chain, the country needs to create an investment-friendly environment, build talent pools, and develop an adequate infrastructure system, according to Ramin Toloui, Assistant Secretary for the Bureau of Economic and Business Affairs at the U.S. Department of State.

Toloui, who is responsible for promoting the development of a resilient supply chain for U.S. semiconductor manufacturers, made the remarks in an interview with Tuoi Tre (Youth) newspaper during his business trip to Vietnam late last month.

The senior U.S. also visited Japan, South Korea, Singapore, and some other Asian countries where he met with partners of the International Technology Security and Innovation (ITSI) Fund, an initiative of the U.S. State Department.

In Asia, Vietnam, Indonesia, and the Philippines were chosen as ITSI partner countries.

He recounted his first trip to Vietnam in 1997, saying that everything in this Southeast Asian country has changed significantly after 27 years.

From Nike, which tapped into the Vietnamese market in 1995, to Intel, which set up its business in Vietnam in 2006, these investments have helped bolster the country’s economic growth and enhance the lives of local people, Toloui said. 

“I still sense the positive energy of the people here," he continued.

"It's the Vietnamese people's desire to learn and work diligently, continuously investing in themselves through education and work, striving to create a better life for themselves."

His business trip to Vietnam included meetings with representatives of the three key pillars for the nation to get involved in the global semiconductor supply chain, namely the government,  academia, and the private sector.

Toloui attended a working session with representatives of the Ministry of Planning and Investment to discuss the necessary government policies to beef up cooperation in the semiconductor industry. 

He highlighted that manpower is one of the main factors based on which the U.S. selected Vietnam as a strategic partner in the diversification of its semiconductor supply chain.

He toured the Intel Vietnam factory, which is the company's largest plant worldwide for assembling, packaging, and testing chips. 

The senior U.S. official also visited the Vietnam National University and the Fulbright University in Ho Chi Minh City, two educational institutions promising to provide talent pools for the semiconductor industry.

He recalled his visit to the Vietnam National University where he met two undergraduate students who won a global competition sponsored by NVIDIA.

“Their project focused on using artificial intelligence to improve motorcycle safety and compliance with helmet laws," he elaborated.

"This was an excellent example of how the potential and creativity of Vietnamese students can be unleashed by expanding educational opportunities.

“I also had an excellent visit to Marvell Technology, another U.S. semiconductor company with a strong presence in Vietnam.

"It was another example of strong partnership between the U.S. private sector and Vietnam."

He went on to say that the U.S. State Department is working hard to promote the assembly, testing, and packaging (ATP) capacity in ITSI partner countries in the Americas and the Indo-Pacific to enhance the flexibility of the supply chain for U.S. semiconductor manufacturers. 

This initiative will help Washington's ITSI partners create an investment environment, support the semiconductor industry, and improve the capacity of the workforce.

Following U.S. President Joe Biden's visit to Vietnam in September last year and the elevation of the Vietnam-U.S. bilateral ties to a comprehensive strategic partnership, many memoranda of understanding have been signed between two sides to promote the growth of the semiconductor industry in Vietnam. 

According to Toloui, the U.S. will assess the semiconductor ecosystem in Vietnam and its growth potential before identifying areas that need to be addressed to realize that potential.

The U.S. government has partnered with the Organization for Economic Cooperation and Development to conduct this assessment and provide a roadmap for the use of the ITSI Fund. This helps Vietnam and the U.S. clarify their goals and focus on the most important factors.

He shared that during his meeting with Vietnamese Deputy Minister of Planning and Investment Tran Duy Dong, both sides discussed the importance of developing a skilled workforce, the need to build an adequate infrastructure system including clean energy and legal infrastructure, as well as policies to encourage more foreign investors to do business in Vietnam.

An underdeveloped semiconductor workforce is a common issue facing countries that are set to develop this industry, including Vietnam, Japan, and European countries, he told Tuoi Tre.

He added that part of the funding from the ITSI Fund is to be used to develop the workforce in Vietnam.

The semiconductor industry has played an increasingly important role in economic development as global demand for semiconductors is on the rise.

Electric vehicle manufacturers need more semiconductors than traditional combustion engine vehicles.

Recent forecasts show that semiconductor sales could reach US$1 trillion by 2030.

Along with the market's growing scale, governments themselves also aim to improve the quality of the workforce, transition to clean energy, and develop infrastructure.

Therefore, Toloui believed that opportunities are available for all U.S. partners, including Vietnam, to engage in the global semiconductor supply chain.

He underlined the need for Vietnam to improve its business climate and policy framework so as to attract more foreign investment and become an investment destination attractive to U.S. investors.

The ITSI Fund was established under the CHIPS Act of 2022 to provide the U.S. Department of State with US$500 million ($100 million per year over five years, starting in Fiscal Year 2023) to promote the development and adoption of secure and trustworthy telecommunications networks and ensure semiconductor supply chain security.

Six countries in the two regions of Latin and Asia were chosen as ITSI partners to ensure diversity in the global semiconductor supply chain, focusing on assembly, testing, and packaging.

The CHIPS Act of 2022, a U.S. law that appropriated new funding to boost domestic manufacturing and research of semiconductors in the U.S, was passed by President Biden in August 2022.

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