Vietnam to enable local firms’ participation in global chip production

The Ministry of Science and Technology will facilitate Vietnamese enterprises’ participation in the global chip production chain by establishing innovation and R&D centers related to semiconductor materials and chip design.

The ministry is completing groundbreaking policy mechanisms to attract high-quality human resources in the semiconductors industry and promote development of chip design and research facilities, Minister Huynh Thanh Dat said in an interview published Monday by the government's news portal.

In the near future, the ministry will increase support for basic semiconductor research through the National Fund for Science and Technology Development (NAFOSTED) and prioritize resources to implement the National Product Program, including integrated electronic circuits.

It will strengthen coordination with other ministries, businesses, and large corporations like Viettel, VNPT, FPT and CMC to research and evaluate stages in the chip production chain (design, manufacturing, processing, and packaging) in which Vietnam can develop advantages and the ability to succeed.

The ministry will also recommend that the government and Prime Minister Pham Minh Chinh prioritize appropriate resources and policies.

It will outline investment policies and support the supply of equipment for measuring and testing semiconductor chips, helping cut production time and promote sales.

Minister Dat said that Vietnam has the potential, conditions and components to build a semiconductor industry ecosystem and become part of the global semiconductor value chain. The country is attracting an increasing number of multinational semiconductor businesses from the U.S., South Korea, Japan and Europe.

Vietnam has completed the legislative corridor necessary to prioritize investment and development of chips, Dat noted. "The Investment Law and the Corporate Income Tax Law have expanded incentives for high-tech, large-scale, high-value-added ventures, including chip fabrication."

The prime minister's Decision No. 38 dated December 30, 2020 prioritizes integrated electronic circuit manufacturing as a hi-tech area for investment and development.

An R&D environment for integrated circuits has steadily emerged over the last few years. Several organizations and enterprises have invested in researching and developing chip technology, including the Viettel Research and Development Institute and the Circuit Design Research and Training Center (ICDREC, Ho Chi Minh City National University).

Vietnamese higher education institutions have likewise prioritized the development of high-quality human resources in the semiconductor industry. Some higher education organizations have formed partnerships with industry players to coordinate chip R&D, Dat said.

However, studies show that Vietnam's semiconductor sector has a poor level of localization; and R&D activities are not synchronized. Furthermore, Vietnam continues to lack high-quality human resources in the semiconductor industry, the minister added.

He said efforts must be made to sign cooperation agreements with technical powers in order to progress toward complete autonomy in critical phases in chip production.

Vietnam has selected five universities for training a much needed semiconductor industry workforce, Deputy Minister of Information and Communications Nguyen Huy Dung said on January 26.

The five institutions are Hanoi National University, Ho Chi Minh City National University, Hanoi University of Science and Technology, Hanoi University of Science and Technology, FPT University, and Danang University of Science and Technology.

In late January, South Korean giant Samsung Electronics and the University of Engineering and Technology, under Vietnam National University Hanoi (VNU Hanoi), signed a memorandum of agreement to cooperate on a masters course for semiconductor and chip training.

During his working visit to Vietnam, Under Secretary of State Jose Fernandez on January 26 told reporters in Hanoi that as many as 15 U.S. semiconductor companies are prepared to invest circa $8 billion in Vietnam and awaiting for clearer signals of renewable energy development to make the move.

"All the companies have made commitments to their shareholders and customers that they will use only renewable energy, so they are waiting for a renewable energy regime in Vietnam to expand," he said.

Chipmaker Intel has invested some $1.5 billion in a packaging and testing plant in Vietnam. After inaugurating a factory in Bac Ninh province, northern Vietnam, last October, Amkor Technology Inc., plans to start mass production this year. Several other American chipmakers, including Marvell, plan Vietnam investments.