Vietnam’s Strategic Plans for Semiconductor Development

On September 21, 2024, Prime Minister Pham Minh Chinh of Vietnam unveiled a strategic plan aimed at advancing the country’s semiconductor industry by 2030.

Coinciding with this announcement, a notable book titled ‘Chien truong ban dan – Canh tranh chien luoc va tu chu doi moi sang tao cua Trung Quoc the ky 21’ (translated as Semiconductor Battlefield: China’s Strategic Competition and Innovation Autonomy in the 21st Century) by Pham Sy Thanh and Nguyen Tue Anh was released, garnering considerable public interest.

There’s a prevailing belief that substantial financial investment is all that’s needed for technological development, while others argue that large corporations dominate the semiconductor race.

However, our publication introduces a comprehensive policy framework built around four key areas: political commitment; investment and financial backing; strategies for technology promotion; and the development of human resources. We assert that success in the competitive semiconductor field requires a holistic strategy that incorporates all these elements.

The Role of Semiconductors

Semiconductors are crucial materials for creating microchips, which power a multitude of technologies. The inability of the US to produce the latest, high-performance chips domestically could hinder its abilities in crucial areas like data processing, renewable energy, artificial intelligence, and national defense.

The semiconductor industry originated in the US during World War II, driven by national security concerns that continued throughout the Cold War, leading to a series of significant innovations.

As the semiconductor sector grew and became increasingly commercialized, the government refocused its efforts elsewhere.

However, the current inability of the US to manufacture leading-edge chips (less than 5nm) at home, alongside the national security risks posed by this gap, prompted lawmakers from both parties to endorse the Chips and Science Act.

The historical advantage of the US in this arena stems from its established innovation ecosystem, which includes government support, independent agencies, private sector involvement, academic institutions, and even emerging micro-level contributors, all working within a framework that fosters innovation.

The Geopolitical Shift in Semiconductor Production

The landscape of semiconductor production is experiencing a significant transformation. Since 2023, numerous nations, beyond just the US and China, have unveiled strategies to develop their semiconductor capabilities.

Countries are eager to secure a stake in the semiconductor supply chain. For instance, the US is concentrating on design and intellectual property, along with top-tier chip manufacturing, while China aims for the full localization of its supply chain.

In our book, we begin by questioning whether the US might fall behind China, which has been making notable advancements as highlighted by global media.

Data indicate that the US remains ahead in chip design, a high-value segment of the semiconductor industry. Additionally, the US has collaborated with partners in the Chip 4 Alliance (South Korea, Japan, Taiwan) to maintain its supply chain integrity while implementing export restrictions. Conversely, China faces significant challenges in reaching the highest technology levels.

Future Demands for Talent in Semiconductor Production

As we enter a new era characterized by high data processing and analytical capabilities, it’s crucial to envision the future supply chains that will emerge.

For instance, a semiconductor fabrication plant is set to be established in Arizona, USA, within the next five years, projected to require at least 5,000 engineers.

The ongoing construction of various fabrication facilities around the globe is driving a significant demand for skilled and well-trained engineers.