As Indonesia steps into a new era of opportunity, the archipelago stands at the crossroads of political continuity and economic transformation. Indonesia’s GDP is expected to reach USD 1.463 trillion in 2025 with stable growth, underscoring its macroeconomic resilience. To help investors navigate this landscape, our new ebook, INHERITING THE LEGACY IN INDONESIA, provides a […]
On September 21, 2024, Vietnam’s Prime Minister signed Decision No. 1018, setting forth an ambitious strategy to develop the country’s semiconductor industry. This plan aims to position Vietnam as a significant player in the global semiconductor supply chain by 2030, with aspirations of becoming a world leader by 2050.
At the heart of this initiative lies a unique formula:
C = SET + 1
- C: Semiconductor Chips
- S: Specialized Chip Development
- E: Electronics Industry
- T: Technology Human Resources
- +1: Vietnam as a safe and reliable destination for the global semiconductor supply chain
This formula encapsulates Vietnam’s comprehensive approach to achieving sustainable growth in the semiconductor sector.
Developing the Semiconductor Industry according to a 3-Phase Roadmap
The strategy outlines a phased roadmap, each stage building upon the previous to ensure steady progress.
Phase 1 (2024–2030): Establishing the Foundation
In the first phase, Vietnam aims to capitalize on its geopolitical advantages and human resources. The country will selectively attract foreign direct investment (FDI) to form basic capabilities across the semiconductor supply chain, including research, design, production, packaging, and testing.
Key objectives include:
- Establishing 100 design enterprises
- Building one small-scale semiconductor chip manufacturing facility
- Developing 10 semiconductor packaging and testing factories
By 2030, the revenue from Vietnam’s semiconductor industry is projected to exceed $25 billion annually, with added value reaching 10–15%. The electronics industry is expected to achieve revenue of over $225 billion annually. Human resources will also expand to over 50,000 skilled engineers and specialists.
Phase 2 (2030–2040): A Global Semiconductor Hub
The second phase focuses on elevating Vietnam to become one of the global centers of semiconductor and electronics manufacturing. This includes fostering self-reliance while maintaining partnerships with foreign investors.
The objectives for this phase are:
- Increasing the number of design enterprises to 200
- Constructing two semiconductor chip factories
- Expanding to 15 packaging and testing factories
By 2040, annual semiconductor revenue is forecast to exceed $50 billion, and the workforce is expected to surpass 100,000 qualified engineers.
Phase 3 (2040–2050): A Global Leader
By 2050, Vietnam aspires to become a world-leading country in the semiconductor and electronics industries, with mastery in research and development.
The goals for this phase include:
- Establishing 300 design enterprises
- Building three semiconductor manufacturing factories
- Operating 20 packaging and testing factories
Revenue from the semiconductor industry is anticipated to exceed $100 billion annually, with added value reaching 20–25%. The workforce will continue to grow, ensuring Vietnam’s ability to lead in specific production chain segments.
Five Tasks for Developing the Semiconductor Industry
Decision No. 1018 outlines five key tasks aimed at advancing Vietnam’s semiconductor industry. These tasks provide a comprehensive framework to build a robust, competitive, and sustainable sector.
1. Developing Specialized Chips
The strategy emphasizes research and development of core technologies to create next-generation specialized chip products, such as AI chips and IoT chips. This will be achieved through investments in core semiconductor technology research centers. These centers will focus on areas of significant technological breakthroughs, ensuring Vietnam remains at the forefront of global semiconductor advancements.
Efforts will also include the development of a domestic semiconductor industry ecosystem. This involves creating strong connections between Vietnam’s ecosystem and those of its strategic partners in the global semiconductor supply chain. Additionally, preferential mechanisms, investment support, and special state financing will be allocated to build a high-tech, small-scale semiconductor chip manufacturing factory. This facility will cater to research, design, and production needs, further boosting Vietnam’s chip development capabilities.
2. Developing the Electronics Industry
Vietnam will allocate resources for research and development of electronic equipment, focusing on new-generation devices that integrate specialized chips and AI technologies. A prioritizing policy will direct the use of state budgets to purchase domestic electronic equipment, thereby promoting the growth of Vietnam's electronics market.
The government will support and encourage large domestic corporations and enterprises to produce next-generation electronic equipment. The goal is to transform these entities into multinational enterprises capable of enhancing global competitiveness. Moreover, Vietnam will develop a supportive ecosystem for industries by promoting technology transfer and fostering joint ventures and partnerships with foreign enterprises. These collaborations will serve the production of new-generation civil and specialized electronic equipment.
3. Human Resource Development
Human resource development is a cornerstone of Vietnam’s semiconductor strategy. The government will focus on retraining, advanced training, and transitional training programs for existing human resources, particularly engineers in electronics, telecommunications, IT, and digital technology. The abundant pool of STEM-capable professionals in Vietnam will be leveraged through long-term, market-driven planning.
Financial support will be provided for training activities, curriculum development, and university-level research programs. Investments will also be made in modern equipment for training facilities and research institutes, as well as the establishment of data centers and supercomputer systems to support these initiatives.
Additionally, the government will implement breakthrough policies to attract and nurture world-class talent and experts in semiconductors and electronics, both domestically and internationally. Collaborative agreements will be pursued with countries facing human resource shortages in the semiconductor field, and commitments will be signed between training institutions and domestic and foreign enterprises to address workforce needs effectively.
4. Attracting Investment in the Semiconductor Sector
Vietnam will build the most attractive incentive mechanisms to selectively attract foreign investment projects with high technology content in the semiconductor and electronics industries. This includes support from central and local budgets and the establishment of an Investment Support Fund to minimize the impact of global minimum income tax regulations.
Priority will be given to foreign enterprises engaged in research and development activities in Vietnam, those utilizing Vietnamese supporting industries, and those entering joint ventures or partnerships with domestic companies. To facilitate operations, Vietnam will implement a green lane mechanism and other streamlined processes for enterprises importing and exporting semiconductor-related goods, raw materials, supplies, and components.
Infrastructure development will also play a critical role. Investments will be made in digital infrastructure, electricity, and water supply systems to meet the demands of semiconductor and electronics manufacturing plants in designated areas. Electricity and water price support mechanisms will be introduced to ensure operational efficiency for these facilities.
5. Enhancing the Ecosystem
The development of a comprehensive domestic ecosystem is essential for the semiconductor industry's growth. This includes improving connectivity between Vietnam’s ecosystem and those of global strategic partners. Policies and initiatives will be implemented to ensure the ecosystem supports the entire production chain, from resource exploitation to product delivery.
Vietnam will also establish mechanisms to ensure sustainability in the semiconductor industry. This includes the development of regulations for the treatment, reuse, and disposal of toxic waste generated during semiconductor and electronics production. Measures will be taken to enhance environmental treatment capacity, ensuring resource exploitation is balanced with environmental safety and sustainability.
Organizational Support and Environmental Sustainability
To oversee this ambitious strategy, a National Steering Committee for Semiconductor Development, chaired by the Prime Minister, will be established. This committee will provide top-level guidance and coordination for all initiatives.
An Expert Advisory Group will also be formed, comprising independent professionals with deep expertise in semiconductors and electronics. This group will serve as a strategic advisory body, providing in-depth analyses and recommendations to support the Steering Committee and the Prime Minister in guiding the industry’s development.
Environmental sustainability is a priority within the strategy. Vietnam will implement strict regulations for managing toxic waste generated during semiconductor production, focusing on treatment, reuse, and disposal processes. Investments will also be made to improve environmental treatment capacity, ensuring the semiconductor industry grows sustainably while minimizing its ecological impact.
Conclusion
Vietnam’s strategy for semiconductor development marks a transformative chapter in the country’s industrial growth. With its phased approach, focus on talent development, and commitment to sustainability, Vietnam is positioning itself as a crucial player in the global semiconductor landscape.
This ambitious plan not only promises economic growth but also reinforces Vietnam’s reputation as a reliable and innovative partner in the international technology arena.
