Vietnam’s chip sector on the grow

Vietnam is in a position to become the next chip design hub with Southeast Asia a natural choice for semiconductor factories looking to relocate outside of China.

The country has used billions of U.S. dollars in investments to set up research and education centers, attracting major chipmakers to shop there.

Vietnam has risen as the third largest chip exporter to the U.S., behind Malaysia and Taiwan, according to the Vietnamese Ministry of Information and Communications. In February 2023, its semiconductor exports to the U.S. reached $562.5 million, up from $321.7 million in February 2022.

Currently, most of Vietnam’s chip exports come from foreign-invested companies. Amid the trend, U.S. chip vendor Marvell Technology announced last week its plans to establish a world-class design center in Ho Chi Minh City.

The facility will house advanced semiconductor engineering and will be a top technology workplace for those looking to upgrade their skills and careers, Marvell said.

It intends to invest in the development of critical technical skills in Vietnam through a newly formed scholarship program in order to meet the talent requirements of its new design center in Vietnam, said the company. The program will support talented students pursuing degrees in engineering and computer science at selected universities in Vietnam.

The Marvell Scholarship program aims to strengthen critical engineering skills in Vietnam, expand female workforce representation at all levels and responsibilities, and improve diversity by recruiting from low-income regions.

"One of the major challenges of the global semiconductor industry is research and engineering shortage and this presents a huge opportunity for aspiring Vietnamese tech talents," said Loi Nguyen, executive VP of Marvell's optical and copper connectivity group and a native of HCMC.

"The establishment of Marvell's Design Center in Vietnam is a significant step towards bridging this talent gap and fostering the semiconductor industry in Vietnam," he said.

Last year, the U.S.-based electronic design automation (EDA) company Synopsys started to expand its investments in Vietnam, announcing its commitment to training Vietnamese chip designers in HCMC.

Dutch suppliers to giant chipmaker ASML Holding gauged reality in Vietnam, Singapore and Malaysia this March to build factories in the Southeast Asian markets. The mission’s purposes include “exploring the possibilities for establishment/production in Vietnam and/or Malaysia,” the Brabant Development Agency, a Dutch public body co-organizing the working trip, said in an announcement.

The other purposes are exploring the local business climate, finding available local support, learning from entrepreneurs who are already established, and building local networks, said the agency.

Vietnam has mostly focused on attracting big players in the semiconductor businesses to invest in the country. American giant Intel was the first major corporation to operate parts of the chip-making process in Vietnam, with its test and assembly facility based in HCMC, and Intel has so far invested $1.5 billion into the country, with fresh investments in the pipeline but Intel has not publicized the new amounts.

After Intel, other major global players like Samsung, Qualcomm, Texas Instruments, SK Hynix, Hayward Quartz Technology, Synopsys, and NXP Semiconductors entered the country.

Today, more than half of Samsung smartphones are made in Vietnam, where the Korean giant launched a $220 million R&D center in late December in a fresh move expected to turn Vietnam into a global research and development hub.

In August 2022, Prime Minister Pham Minh Chinh called on the Vietnamese tech giant to seriously and effectively implement plans for R&D, designing and manufacturing domestic chips.

Right after that, FPT, another Vietnamese tech giant, and Vietnamese electric vehicle maker VinFast entered the world's semiconductor industry. FPT Software launched FPT Semiconductor, and through the new subsidiary, FPT Software aimed to gain a slice of Asia Pacific's semiconductor market, which accounts for 60% of global sales, the Hanoi-based firm said in September 2022

By 2023, FPT Semiconductor plans to supply 25 million chips globally, FPT Software said.