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Cooperation with US to propel development of Vietnam’s semiconductor industry: expert

Cooperation with US to propel development of Vietnam’s semiconductor industry: expert

Saturday, September 23, 2023, 09:36 GMT+7
Cooperation with US to propel development of Vietnam’s semiconductor industry: expert
Workers at a factory operated by Intel in Vietnam. Photo: Supplied by Intel

Vietnam and the U.S. have announced their intention to bolster cooperation in the fields of science, technology, digital innovation, semiconductor manufacturing, and chip production, creating ample opportunities for Vietnamese tech firms to establish a strong presence in global supply chains.

This cooperation is poised to present significant opportunities for the development of Vietnam’s domestic semiconductor sector, Vo Xuan Hoai, deputy director of the Vietnam National Innovation Center (NIC), said in an interview with Tuoi Tre (Youth) newspaper.

The NIC has inked numerous memoranda of understanding with U.S. partners during Vietnamese Prime Minister Pham Minh Chinh’s ongoing week-long visit to the U.S. for the high-level General Debate of the 78th United Nations General Assembly.

Vietnam has identified science, technology, and innovation as the driving forces for its development. Consequently, collaboration with the U.S. is expected to hasten the transformation of Vietnam’s development model and promote economic restructuring that aligns with green, sustainable, and inclusive principles.

The partnership between Vietnam and the U.S. is extremely promising, partly due to its potential to empower Vietnamese enterprises in their quest for integration into the global supply chains of U.S. tech giants and for the expansion of their operations into the U.S. market.

According to Hoai, the partnership between the two countries can facilitate investment and R&D activities for both Vietnamese and American enterprises, thus fostering a suitable environment for growth and sustainable development within the technology sector.

Nevertheless, it’s critical that Vietnamese enterprises satisfy specific requirements and standards to secure a foothold in the global supply chains of U.S. enterprises. These include improving competitiveness, investing in R&D, enhancing product and service quality, complying with intellectual property regulations, effective data management, and putting a focus on innovation.

Perhaps most important, Vietnamese enterprises must gain support from the government.

Vo Xuan Hoai, deputy director of the Vietnam National Innovation Center
Vo Xuan Hoai, deputy director of the Vietnam National Innovation Center

Currently, Vietnamese technology companies are strategically positioned for collaboration with their U.S. counterparts. The country’s geographical position in the heart of Southeast Asia allows it to serve as a pivotal link between U.S. tech firms and the Southeast Asian market.

Additionally, the low cost of its large, highly skilled IT workforce and rapidly improving digital infrastructure serve as major advantages in comparison to the country’s neighbors.

Thanks to the emergence of large, homegrown e-commerce fintech firms, Vietnam’s digital economy is poised for the fastest growth in Southeast Asia, forecasted at 31 percent for 2022-25. This positions the country’s enterprises as potential top-tier suppliers for tech giants, such as Foxconn and Luxshare.  

According to Hoai, there is immense competition to supply these firms and it is heavily dependent on the ability of would-be suppliers to flexibly manage projects, deliver products, and continuously improve and invest in the capabilities of their R&D departments.

On Tuesday, the NIC signed a cooperative agreement with Cadence Design Systems, an American computational software multinational, to design and produce chips in Vietnam. Vietnamese Prime Minister Pham Minh Chinh participated in the signing event.

The center also inked a deal with Arizona State University to develop human resources for Vietnam’s semiconductor industry.

Meanwhile, the Ministry of Education and Training entered into an agreement with Intel to cultivate a skilled workforce for the hi-tech sector.

According to Minister of Planning and Investment Nguyen Chi Dung, these agreements mark the commencement of a deeper partnership in the semiconductor industry between Vietnamese and U.S. organizations.

In his statements, Dung affirmed that Vietnam’s capacity to cultivate the semiconductor industry and develop a workforce of 50,000 engineers for the sector by 2030.

Employees at work at Dien Quang Hi-Tech Co. Ltd. at the Saigon Hi-Tech Park in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre
Employees at work at Dien Quang Hi-Tech Co. Ltd. at the Saigon Hi-Tech Park in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre

Thomas Vallely, chairman of Fulbright Vietnam University’s board of trustees, emphasized that the elevation of Vietnam-U.S. relations to a comprehensive strategic partnership will pave the way for cooperation in science and technology, specifically in the chip and semiconductor sector.

According to Vallely, it is possible for Vietnam to take over some of the phases in large semiconductor projects currently underway by U.S. firms.

Specifically, inking deals to manage assembly and packaging will allow Vietnamese enterprises to forge relationships with chip giants from Taiwan, Japan, and South Korea.

However, competition among companies from countries looking to make similar moves is intense, and Vietnam must ensure a stable energy supply for semiconductor factories in order to prevent power outages, such as those experienced by the northern region earlier this year.

The country’s growing need for engineers in the semiconductor and IT industries has prompted local universities to offer programs to meet ongoing demands, Vallely said.

Vietnamese Prime Minister Pham Minh Chinh witnesses the signing of a cooperative agreement between Vietnamese and U.S. enterprises. Photo: NIC
Vietnamese Prime Minister Pham Minh Chinh witnesses the signing of a cooperative agreement between Vietnamese and U.S. enterprises. Photo: NIC

Vietnam embraces cooperation with U.S. giants

According to Tran Ba Linh, general manager of Dien Quang Hi-Tech Co. Ltd., U.S. tech firms investing in Vietnam will need local firms with available factories, human resources, production lines, technology, and machines that can be outsourced.

Dien Quang is prepared to join U.S. supply chains and is willing to outsource products which meet the standards of major firms, Linh said.

The company already has personnel, including R&D engineers and designers who have researched and developed products and equipment for various hi-tech sectors.

Engineers of Real-time Robotics Vietnam Company in Thu Duc City, Ho Chi Minh City design a drone motherboard for AI systems serving rescue efforts and agricultural production. Photo: Tu Trung / Tuoi Tre
Engineers of Real-time Robotics Vietnam Company in Thu Duc City, Ho Chi Minh City design a drone motherboard for AI systems serving rescue efforts and agricultural production. Photo: Tu Trung / Tuoi Tre

According to Luu Anh Tuan, chairman of Viet Nam Rare Earth Joint Stock Company, domestic enterprises can satisfy the requirements of U.S. tech firms.

The semiconductor industry needs many supporting companies. Vietnamese companies can initially support U.S. groups before becoming key factors in their supply chains.

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Thanh Ha - Bao Ngoc - Trong Nhan - Ngoc Hien / Tuoi Tre News

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