FPT, VinFast join global chip supply chain

Vietnamese giants FPT and VinFast are entering the world's semiconductor industry amid a global shortage of this critical part in automobile and electronics manufacturing.

Vietnam's leading ICT company FPT Software recently launched FPT Semiconductor. Through the new subsidiary, FPT Software aims to gain a slice of Asia Pacific's semiconductor market, which accounts for 60% of global sales, the Hanoi-based firm said Monday.

FPT Semiconductor has released its first integrated circuits (ICs), designed in Vietnam and manufactured in South Korea.

“These ICs will be used in Internet of Things medical devices. By 2023, FPT Semiconductor plans to supply 25 million chips globally in seven types to meet diverse needs in telecommunications, IoT, automotive technology, energy, electronics, and others,” it said in a release.

FPT Software cited data from premier global market intelligence firm IDC projecting that worldwide semiconductor revenue will reach $661 billion in 2022, an increase of 13.7% over 2021.

"We look forward to contributing to the development of the fast-growing semiconductor industry in Vietnam and Asia on a broader scale," said FPT Semiconductor's founder and CEO Nguyen Vinh Quang.

"FPT Semiconductor looks to become the chip supplier of choice for businesses in Vietnam and further in Japan, Korea, Taiwan, mainland China, the U.S., and Europe," he added.

After 23 years of leadership in IT services and solutions in Vietnam, FPT Software said it decided to venture into fabless manufacturing. With the establishment of FPT Semiconductor, FPT Software continues to extend its comprehensive ecosystem of digital transformation services and solutions.

Building on the global presence and years of experience across various domains, the firm hopes to accompany clients with consulting and implementing tailor-made solutions, and now with supplying semiconductor components added to its portfolio.

"We are proud that the whole research and development process is conducted by FPT Software's leading engineers in Vietnam," said FPT Software chief operating officer and FPT Semiconductor chairman Tran Dang Hoa.

"The launch of FPT Semiconductor is a testament to Vietnamese intelligence as well as our commitment to continue seeking areas to grow, bringing technological advancement to the business community," he noted.

Semiconductors are a vital component for many industries from consumer electronics to aerospace and have been in high demand since the Covid-19 pandemic. Further advancements in semiconductor technology will be essential to facilitate a new wave of transformative technologies, including artificial intelligence, 5G, electric vehicles (EVs) and IoT solutions.

VinFast, Vietnam’s first global EV maker, and Japan’s Renesas Electronics, a premier supplier of advanced semiconductor solutions, announced Monday that the duo are expanding their collaboration agreement to include automotive technology development of EVs and delivery of system components. The signing of the strategic collaboration took place at VinFast’s factory in Vietnam’s Hai Phong city earlier this month.

Under the deal, Renesas will provide VinFast with products like system-on-chips (SoCs), microcontrollers, analog and power semiconductors. Renesas will also provide technical support to assist VinFast in developing future automotive applications and mobility services.

SoC is an integrated circuit that integrates most or all components of a computer or other electronic systems.

“This new partnership with Renesas will give VinFast access to both advanced in-vehicle semiconductor technology as well as high-level system expertise, with the aim to accelerate the development of safe and sophisticated EVs for global markets,” Le Thi Thu Thuy, vice chairwoman of Vingroup and Global CEO of VinFast, said in the duo’s joint announcement.

VinFast and Renesas have previously collaborated on automotive infotainment systems. Renesas’ SoCs, R-Car hardware platform, and analog products have been implemented in VinFast's new VF8 and VF9 EV models, which are already in use in Vietnam and will be delivered to buyers in Canada, the U.S., and Europe this December.

In a meeting with Prime Minister Pham Minh Chinh on August 16, Vietnamese telecom giant Viettel proposed to the government it would produce chips to meet increasing foreign and domestic demands.

In response, Chinh ordered the military-run group to research and produce chips to assist the country's national digitalization and development of a digital government, digital economy, and digital society.

Vietnam is already home to factories of giant chipmakers like Samsung and Intel. U.S.-based Amkor Technology Inc., a global semiconductor product packaging and test services provider, said it was investing as much as $1.6 billion until 2035 to build a state-of-the-art facility in Bac Ninh province, northern Vietnam as an important part of the American corporation’s worldwide network.

The world has witnessed a shortage of chips which has impacted across-the-board sectors. Powerhouses like the U.S., China and Europe are boosting chip production for national security.