Vietnamese firms bound to be part of semiconductor manufacturing ecosystem: VinaCapital exec

Sooner or later, Vietnamese firms will be part of the semiconductor manufacturing ecosystem and the nation should train engineers accordingly, says Don Lam, general director and founding partner of VinaCapital.

Lam was speaking at the 2023 Investor Conference organized by VinaCapital in Ho Chi Minh City on Tuesday. More than 150 international investors attended the conference, the highest since its 2005 inception.

Lam said investors were very interested in green energy, wind power, technology, semiconductors and hi-tech sectors.

Last week, VinaCapital advised many Taiwanese companies to invest in Vietnam, and they expressed keen interest in the semiconductor industry. The companies were more confident about their potential investments after U.S. President Joe Biden's visit to Vietnam, he added.

Lam noted that until recently, FDI into Vietnam was mainly in textiles, footwear and electronics; now it was moving to chips and semiconductors. Vietnam's way of developing the FDI sector was very sustainable, he stressed.

He added that through discussions with Taiwanese companies, the world's leading place in semiconductor production, initially they will invest directly in Vietnam, but gradually they will have an ecosystem.

What Vietnam needs is human training. Vietnam should train engineers in this industry because the industry has huge potential. Sooner or later, Vietnamese companies will involve in the ecosystem of semiconductor manufacturing before long.

Nguyen Hoai Thu, general director of VinaCapital securities investment fund, commented that Vietnam was on the semiconductor world map with Intel's investment. In 2020, Vietnam's semiconductor export was $4.2 billion, well behind first-placed China with $35.6 billion. In Southeast Asia, Vietnam was third behind Singapore and Malaysia.

Among Vietnamese companies, FPT has occupied pole position in this industry. In 2022, they produced advanced chips using their own designs. FPT also has an advantage in training human resources because it runs a university.

The semiconductor chip industry employs 1.2% of Taiwan’s workforce, but accounts for 20% of the territory's GDP.

From a macro perspective, Andy Ho, general director of VinaCapital's Investment Council, said that the elevation of U.S.-Vietnam ties to a comprehensive strategic partnership during President Joe Biden’s Vietnam visit will have a huge impact on the domestic economy in the long run.

It is expected that the U.S. will increase its FDI capital injection into Vietnam. The country has also benefited significantly from the U.S.-China trade spat. China’s exports decreased by about 13% while that of Vietnam grew by 7% in the 2018-2022 five-year period. Other countries in Southeast Asia also recorded lower growth rates than Vietnam.

The U.S.-Vietnam comprehensive strategic partnership, the highest in Vietnam’s diplomatic hierarchy, has placed the bilateral relations on par with Vietnam's relationships with China, Russia, India and South Korea.