Vietnam shifts up semiconductor value chain as global chip makers seek “China+1” resilience

Vietnam is reshaping its semiconductor strategy, moving beyond low-cost assembly and testing toward higher-value chip design and advanced packaging, as global manufacturers seek to diversify supply chains away from China, according to a report.

The country’s semiconductor market is forecast to reach $10.16 billion in 2025, said the Vietnam Tech & Venture Capital Outlook 2025 report by VinVentures, the investment arm of Vingroup (HoSE: VIC). The shift reflects a broader effort by Southeast Asian economies to capture more value in the global chip industry amid rising geopolitical and supply-chain risks.

While Vietnam has historically functioned as a back-end hub, a structural “upstream pivot” is currently underway. Industrial giants and domestic champions are leading the charge. Nvidia and FPT launched an AI chip factory with an initial $200 million investment, while players such as Intel, Amkor, Hana Micron, and Samsung continue to scale substrate production and advanced packaging facilities.

Domestically, firms like Viettel and FPT Semiconductor are making inroads into 5G and power-management chip design. This evolution is supported by a 20-year training pipeline that has produced over 6,000 design engineers, giving Vietnam a scale advantage over regional peers.

Despite the momentum, industry experts warn of a critical shortage of “chip architects” – the high-level engineers who define system architecture and make pivotal intellectual property (IP) decisions.

“The number of Vietnamese engineers operating at this level remains exceptionally limited, effectively countable on one hand,” the report cited Dr. Trinh Thanh Lam, manager of Synopsys South Asia, as saying.

Vietnam should avoid competing head-to-head with incumbents like TSMC or Samsung on cutting-edge nodes like 3nm or 5nm. Instead, the nation’s “best chances” lie in focused niches, including security cameras, 5G/6G telecom, and ASICs/SoCs for electric vehicles (EVs) and industrial IoT. “If Vietnam hesitates, we lose the decade,” he warned.

Le Quang Dam, general director of Marvell Vietnam, also cautioned that while government policy intent is strong, fragmented decision-making across government, industry, and academia risks turning a capability opportunity into a “timing failure”.

The executive emphasized that outcomes will depend on how decisively the policy framework is implemented, noting that execution speed still lags behind established hubs like Singapore or Taiwan.

The report said that the Vietnamese government has elevated the semiconductor sector to a national priority through Strategy 1018, which mandates the training of 50,000 to 100,000 engineers by 2030. As of the 2025 admissions cycle, over 137,000 students were already enrolled in related fields.

In addition, policy tailwinds are further strengthening with the establishment of the Da Nang Free Trade Zone, designed as a “logistics-manufacturing hybrid” to support specialized warehousing and vibration-controlled storage for the chip industry. Looking ahead, the government has set a target to establish the country's first semiconductor manufacturing facility by 2026.

While venture capital (VC) activity in the sector remains early-stage, exemplified by VB Tech’s recent undisclosed seed round, the strategic upside is significant. Analysts suggest that if Vietnam can coordinate its fragmented decision-making across government and industry, it has a credible pathway to evolve from a manufacturing base into a trusted global technology partner.