Vietnam and Malaysia are major Southeast Asian beneficiaries of semiconductor industry investments and this will benefit other industries as well, said Frederic Neumann, chief Asia economist of HSBC.
“There is a change in semiconductor supply chains globally. We have seen a lot of investment in semiconductors going into advanced economies. And recently, we have seen much going to Southeast Asia and India,” Neumann told The Investor on the sidelines of a Monday conference on business prospects in Ho Chi Minh City.
He added that the key winners on semiconductors in Southeast Asia were Malaysia and Vietnam. “Malaysia is very good at automotive chips, for example, and Vietnam is good at other types of semiconductors. And I think there is still a lot of scope for expansion because global industry is trying to balance supply risks.”
Neumann noted Vietnam can expand its market share and that the semiconductor industry will serve as a supplier to other industries in the country. “If Vietnam has a strong semiconductor supply chain, it can use it build up other industries like television production or anything else that requires semiconductors, including the car industry.”
Semiconductor boost
Many large businesses have invested in Vietnam’s semiconductor industry recently. Samsung is trialling semiconductor production at a factory in Thai Nguyen and Intel has invested $1 billion in chip production in Vietnam.
Hana Micron plans to invest $1 billion in producing semiconductors in Vietnam by 2025. The South Korean firm inaugurated its first semiconductor plant last month in Bac Giang province.
The project, located at Van Trung Industrial Park, is the first of its kind in northern Vietnam. It is also the second factory of Hana Micron Vina, a subsidiary of the South Korean group, in the northern province. The first, which began operations in 2022, manufactures integrated circuit boards for mobile phones and other smart electronic products.
Meanwhile, the northern province of Bac Ninh is about to welcome official operations of a plant invested in by the U.S.-based semiconductor firm Amkor Technology Inc. The firm has said it plans to invest about $1.6 billion until 2035 in building a state-of-the-art facility in the province.
The factory will be among the biggest operated by Amkor globally, covering 1.9 million square feet (over 176,500 square meters). It will deliver advanced system-in-package (SiP) modules and other packaging solutions, helping the firm with supply chain diversification.
Human resources
Neumann said that in order to improve semiconductor production, Vietnam needed skilled workers. The country should lose time in training workers and engineers for the semiconductor industry, he stressed.
The economist’s call for skilled workers was also made by Nguyen Phu Hung, director of the Department of Science and Technology at a press conference last month.
He said that Vietnam had many opportunities to develop the semiconductor industry, but “the biggest challenge is human resources.”
Hung said Vietnam had about 5,000 engineers working in the field of semiconductor chips, which required hi-tech expertise. Therefore, “the Ministry of Science and Technology encourages Vietnamese scientists and researchers abroad to join hands and strengthen the industry,” he said.