Rapid advancement in microchip technology
Vietnam is taking significant steps to boost its domestic semiconductor industry, as announced at a recent meeting. The goal is to speed up the development of this critical sector, with the government fostering close coordination between the state, businesses, and educational institutions.
Prime Minister Pham Minh Chinh has set a challenging yet ambitious target: Vietnam must complete the design, manufacture, and testing of crucial semiconductor chips by 2027. To achieve this, the government will focus on attracting foreign investment in advanced, innovative, high-tech, and environmentally friendly semiconductor projects.
The Ministry of Agriculture and Rural Development has been tasked with strengthening scientific research and international cooperation to acquire processing technology for these materials. Additionally, they will propose legal additions regarding strategic minerals for industry development, with a focus on accelerating mineral surveys to ensure control over input materials, reduce external dependence, and localise relevant supply chains.
The Ministry of Education and Training will oversee training activities under a specific development programme towards 2030. The focus is on strengthening links between the state, academia, and industry to ensure training effectiveness. Vietnam aims to train at least 50,000 semiconductor engineers by 2030.
The Ministry of Justice will continue working with relevant agencies to improve the institutional, legal, and policy framework to support the rapid development of the semiconductor industry. This includes reviewing and amending tax policies to incentivize large enterprises to support small- and medium-sized enterprises.
The Ministry of Construction will propose solutions to ensure transport infrastructure supports the shipping, delivery, and logistics services of semiconductor manufacturing enterprises. This is crucial for the smooth operation of the industry and its integration into global production and supply chains.
The Ministry of Foreign Affairs is tasked with enhancing bilateral and multilateral cooperation, mobilising international resources for human resource development in the semiconductor industry, and boosting Vietnam's image as a top destination for the industry. In this regard, an institution in Germany, such as Germany Trade & Invest (GTAI) or regional chambers of industry and commerce (IHK), could engage in international cooperation for the development of Vietnam's semiconductor industry.
Currently, there are nearly 50 foreign corporations and around a dozen Vietnamese companies in the chip design industry. Vietnam hosts about 170 foreign-invested projects in semiconductors and high technology, registered at around $11.6 billion. The government will shift the focus of preferential policies from attracting investment to promoting tech transfer. To ensure this, the government will revise investment incentive policies to include binding conditions for tech transfer for foreign-invested enterprises.
The third meeting of the National Steering Committee on Semiconductor Industry Development is expected to be held by the end of Q3. Vietnam will soon finalise policies to resolve issues in infrastructure, regulatory frameworks, and personnel. These projects should have the capacity to generate spill-over effects and connect with global production and supply chains.
In conclusion, Vietnam is making concerted efforts to develop its domestic semiconductor industry. With a focus on collaboration, innovation, and human resource development, the country is positioning itself as a key player in the global semiconductor market.
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