Reliable, resilient energy supply imperative to realize Vietnam’s semiconductor aspirations: US envoy

Resilient, reliable energy supply is critical for developing a much sought-after semiconductor ecosystem in Vietnam and enticing American investors, says U.S. ambassador to Vietnam Marc Knapper.

Responding to The Investor on Wednesday on a query about the progress of semiconductor cooperation between the two countries since bilateral relations were upgraded to a comprehensive strategic partnership last year, Knapper lauded the rollout of the direct power purchase agreement (DPPA) mechanism.

The mechanism enables existing and potential investors to contract directly with renewable energy generators to power their plants in Vietnam.

Knapper stressed that the development was the result of seven years of hard work by the U.S. and Vietnamese governments.

“It reflects the importance that the government of Vietnam places on having this kind of mechanism to make Vietnam more attractive to investors as they consider high-tech investments,” he said.

He was speaking at a press meeting held on the sidelines of the inauguration ceremony of the International Technology Security & Innovation Fund (ITSI Fund), an initiative of the U.S. CHIPS and Science Act, designed to enhance semiconductor capabilities and supply chain resilience worldwide. Vietnam and seven other “strategic countries” have been selected to join the initiative.

Vietnam has received “tremendous interest” from members of the U.S. semiconductor industry over the past year, he said, citing two visits by the Semiconductor Industry Association, separate visits by Apple’ CEO Tim Cook, Nvidia president and CEO Jensen Huang.

Other American business leaders were “looking at Vietnam as a place to help build out their high tech investments,” he added.

The diplomat also pointed to increasing engagements between U.S. tech companies and universities and Vietnamese educational institutions in developing a semiconductor workforce.

The Vietnamese government has rolled out an ambitious project to train 50,000 engineers for this industry by 2030. Some VND26 trillion ($1.06 billion) will be needed for this task, of which VND17 trillion will come from the state budget, the Ministry of Planning and Investment said in April.

U.S. tech companies like Qorvo, Cadence, and Synopsys have joined the effort. Phenikaa has partnered with Synopsys on workforce development in the central city of Danang.

For an analog Integrated Circuit (IC) design course that opened in Hanoi last July, Qorvo, Inc. sent its IC design lecturers and specialists while Cadence Design Systems, Inc. supported the course with its IC software copyrights.

Meanwhile, earlier this year, Arizona-headquartered Amkor Technology decided to add $1.07 billion to its existing factory in northern Vietnam, increasing its total investment to $1.6 billion.

“We've had a tremendous year, one about which we're very proud. But we're just getting started, and we've got a lot of great things coming in the months and years ahead,” Knapper said.

Vu Quoc Huy, director of the National Innovation Center (NIC) under the Ministry of Planning and Investment, which coordinates the government’s semiconductor development efforts, said that after status upgrade to bilateral relations last September, the two countries have undertaken numerous activities to bolster bilateral semiconductor cooperation.

A large number of American companies have partnered with companies and universities in Vietnam to develop the needed workforce, he said.

“It will take much more time for U.S. companies to come to Vietnam to survey and make investment decisions, either in new projects or expansion schemes,” he added.

‘Critical partner’

Virgina Kent, senior coordinator with U.S. CHIPS Act ITSI under the U.S. State Department’s Bureau of Economic and Business Affairs, said that as far as her agency is concerned, Vietnam is a critical partner. “We do not have that many partners, Vietnam is one of eight,” she stressed.

“We are looking to Vietnam, especially in the assembly, testing, and packaging (ATP) area. We feel that there's an immense opportunity here, both with the Vietnamese, U.S., and other partner countries, companies to further the investment that's already here,” she said.

She said Vietnam has made “excellent progress” on the OECD ecosystem review, which is set to be published in the coming months.

“The OECD ecosystem reviews are an excellent way to understand the vibrant ecosystem in Vietnam, including infrastructure, regulatory issues, workforce development and skills that will be needed to expand further the semiconductor supply chain in Vietnam,” she explained.

Jeffrey Goss, ITSI principal investigator, Arizona State University – organizer of the ITSI Policy and Supply Chain Leadership Institute event, said Vietnam is in a “very good position” to develop its semiconductor ecosystem by working with the U.S. government, states, and suppliers.

Huy from the NIC said that for the local semiconductor industry to thrive, Vietnam needs foreign investors, particularly from the U.S., to help local businesses gradually join the global semiconductor value chain.

He said the Vietnamese government will continue to introduce incentives and create a conducive business environment for foreign semiconductor firms to invest in the country.