'C = SET + 1' Strategy can realise Việt Nam's semiconductor ambitions
IN THE LAB: Prime Minister Phạm Minh Chính visiting a semiconductor chip production line at Hana Micro Vina in the northern province of Bắc Giang in 2023. — VNA/VNS Photo Dương Giang |
Việt Nam is betting on semiconductors as one of the high-tech sectors that will propel the country into a new era of development. To foster this nascent but promising industry, Việt Nam needs a unique approach, a grand aspiration, firm determination, perseverance, and a willingness to accept risks. In this context, Minister of Information and Communications Nguyễn Mạnh Hùng outlines a potential semiconductor strategy for the country.
Minister of Information and Communications Nguyễn Mạnh Hùng. — VNA/VNS Photo |
If we were to formulate Việt Nam's Semiconductor Strategy, it might look like this: C = SET + 1 (C stands for Chip, S for Specialised, E for Electronics, and T for Talent).
At the core of the Semiconductor Strategy are the design and manufacture of semiconductor chips.
C (Chip)
The core technologies of the Fourth Industrial Revolution (4IR) — the Internet of Things (IoT) and Artificial Intelligence (AI) — are driven by semiconductor chips. IoT digitises the physical world, creating a digital environment and generating data, while AI processes this data, adding value. The heart of both IoT and AI is the semiconductor chip.
Semiconductors are reshaping the world we live in, embedded in nearly every device and facet of life. They play a crucial role in economic and national security. This influence is expected to continue at least until the mid-21st century, as semiconductors are integral to the ongoing global digital transformation.
S (Specialised chips)
The 4IR encompasses technologies like AI, IoT, and industrial automation, all of which demand high computational performance, significant data processing capacity, and rapid response times. Specialised chips are designed to meet these needs, outperforming general-purpose chips in specific applications. They are vital for sectors like low-power IoT, high-security industrial systems, telecommunications, healthcare, transport, and energy.
Specialised chips will drive technological advancements. When general-purpose chips are used in specialised applications, they typically only use 10-20 per cent of their capacity, resulting in inefficiencies and higher costs, particularly in terms of power consumption. While general-purpose chips are produced by a few manufacturers, specialised chips are far more diverse, creating numerous opportunities.
While the Third Industrial Revolution was defined by general-purpose chips, the Fourth Industrial Revolution will be marked by specialised chips. Countries that are latecomers in the semiconductor race should focus on specialised chips.
E (Electronics industry)
The development of Việt Nam's semiconductor industry must be closely aligned with the growth of its electronics and digital transformation industries. Semiconductor chips are an essential component of electronic devices. Without a strong electronics industry, chipmakers would be dependent on external buyers, such as electronics manufacturers. All the 'dragon' and 'tiger' economies have established robust electronics industries.
With the rise of AI, next-generation electronics will need to be AI-powered, and AI chips will become central to these new devices. In the late 20th century, incorporating semiconductor chips into consumer electronics helped transform Japan into an industrial powerhouse. Similarly, countries that integrate AI chips into their electronics could become future 'dragon' economies.
If Việt Nam chooses this path, it has the potential to lead the industry, reviving its 'lost' electronics sector. Developing the electronics industry will also create a downstream market for semiconductors. The electronics industry, which includes consumer and specialised electronics (telecommunications, healthcare, energy, automotive, aerospace, defence, etc.), is five to six times larger than the semiconductor industry.
The digital transformation sector is even larger, involving the digitisation of the physical world through IoT devices that require semiconductor chips. The demand for chips in the digital transformation and electronics sectors is immense, even though these chips are less complex than high-tech semiconductors from companies like Intel or Nvidia.
'T' (Talent)
A key element of Việt Nam's Semiconductor Strategy is to position the country as a global talent hub for the semiconductor industry. This talent pool will attract investment in research, design, production, packaging, and testing. Việt Nam’s hub will also encompass outsourcing and labour export activities related to semiconductors.
Việt Nam is well-equipped to meet labour demands through 'reskilling' and 'upskilling'. The country has 700,000 engineers in electronics, telecommunications, IT, and digital technology, many of whom can be retrained for the semiconductor industry. Việt Nam’s STEM education is also among the best globally.
Every year, thousands of students graduate in fields like electronics, telecommunications, IT, and semiconductors. Talent is the foundation for building Việt Nam’s semiconductor industry, and human resources must span all stages of the industry, not just chip design.
Preparing the workforce requires a long-term vision but must also adapt to market needs. Partnerships between training institutions and semiconductor companies, both domestic and international, will be key to success. At the national level, the Government will establish agreements with countries experiencing shortages of semiconductor talent.
A successful training programme needs to guarantee job placements with attractive salaries — semiconductor engineers must earn more than IT engineers. While long-term education and research programmes are essential, including STEM education from primary to postgraduate levels, short-term solutions are also necessary to address immediate labour shortages through quick training.
The best short-term option is to reskill or upskill IT, software, and electronics engineers. With 6 to 12 months of retraining, they can be ready for the semiconductor industry. This effort requires teachers, instructors, facilities, and curricula, necessitating collaboration between semiconductor companies and universities, as well as government investment. Retraining teachers or recruiting foreign semiconductor experts may be a top priority in the near term.
'+1' (X + 1)
The global semiconductor industry is undergoing a restructuring process with an 'X + 1' strategy, aiming to diversify supply chains across all stages of the industry. Countries with established or partial semiconductor industries seek to establish additional production sites, and Việt Nam is well-placed to be that '1'. Việt Nam has strong strategic relationships with most major semiconductor powers and can participate in all stages of the industry.
With this strategy, Việt Nam will attract foreign direct investment, offering a 'safety net' to the global semiconductor industry. FDI companies will find that Việt Nam not only offers human resources, land, infrastructure, and tax incentives but also ensures safety – a top priority for an industry that is so critical to national economic and security interests.
Việt Nam has a geopolitical advantage in the semiconductor industry. Within a 4-5 hour flight from Việt Nam lies 70 per cent of the world's semiconductor industry. The country is also politically stable, has one of the fastest-growing economies, and has a national strategy for semiconductor development, with the Party and State giving high priority to this industry.
A differentiated approach
'C = SET + 1' represents a unique strategy. The global semiconductor industry is highly innovative, with new business models constantly emerging. These shifts often lead to breakthroughs, creating new leaders in the field.
With Việt Nam’s participation and differentiated approach, a new global semiconductor business model could emerge. However, the process is not easy. Success requires a unique strategy, a grand vision, unwavering determination, resilience, and a willingness to accept risks.
See also
Industrial parks to go green, adopt sustainable models: forum
10:12 | 22/12/2024 Economy
PM urges Da Nang to lead Vietnam’s economic transformation
09:53 | 22/12/2024 Economy
Viet Nam back as ASEAN’s growth star: HSBC
16:02 | 21/12/2024 Economy
Global coffee production to surge on Vietnam, Indonesia’s rebounding output: USDA
13:02 | 21/12/2024 Economy
Vietnam, China’s special administrative region strengthen trade links
12:31 | 21/12/2024 Economy
Vietnam, China’s Hong Kong strengthening economic collaboration
16:57 | 20/12/2024 Economy
See more news
Trade Minister explores market opportunities in Japan
16:24 | 20/12/2024 Economy
Vietnam draws 5,369 Japanese projects worth nearly 80 billion USD
14:45 | 20/12/2024 Economy
Vietnam emerges as East Asia – Pacific’s economic powerhouse: WB
14:33 | 20/12/2024 Economy
Tax revenue surpasses 1.7 quadrillion VND
14:28 | 20/12/2024 Economy
Vietnam’s GDP growth to outpace region peers: Oxford Economics
14:22 | 20/12/2024 Economy
Five businesses fined over VND2 billion for violating competition laws
17:23 | 19/12/2024 Economy
Vietnam among Asia’s 15 largest economies
17:23 | 19/12/2024 Economy
High-tech investment flows into HCM City
16:35 | 19/12/2024 Economy
Brazil solidifies position as Vietnam's biggest trade partner in Latin America
16:23 | 19/12/2024 Economy
Vietnam's import-export surges 15.3%
16:14 | 19/12/2024 Economy
Vietnam-France ties reach new height in 2024: Ambassador
10:16 | 22/12/2024 Cooperation
Industrial parks to go green, adopt sustainable models: forum
10:12 | 22/12/2024 Economy
Vietnam’s high-end fashion targets Chinese market
10:04 | 22/12/2024 Culture
PM urges Da Nang to lead Vietnam’s economic transformation
09:53 | 22/12/2024 Economy
Aviation sector strengthens smuggling, commercial fraud and counterfeit goods control
09:49 | 22/12/2024 Society
Multimedia
Total FDI registered in Vietnam hits 31.4 billion USD in January-November
09:02 | 17/12/2024 Infographic
First 11 months of 2024: Import-export turnover increases 15.4%
10:55 | 16/12/2024 Infographic
11-month agro-forestry-fishery exports exceed yearly target
19:55 | 15/12/2024 Infographic
Hanoi achieves or exceeds 23/24 socio-economic targets for 2024
08:57 | 13/12/2024 Infographic
Quang Trach – Pho Noi 500kV circuit-3 power transmission line: Miracle in infrastructure development
09:05 | 12/12/2024 Infographic
Gov't targets to gradually make English second language at schools by 2030
15:45 | 21/12/2024 Policy
Nine newly-adopted laws made public
16:42 | 20/12/2024 Policy
Resolution on construction of North-South high-speed railway issued
11:42 | 19/12/2024 Policy
PM requests no one be left behind in apparatus restructuring
09:16 | 18/12/2024 Policy
Ministry proposes incentives for renewable energy projects
16:17 | 20/12/2024 Energy
The Era of Advancement for Vietnam Industrial Park
17:15 | 19/12/2024 Industry
Vietnamese coffee sector working to meet EU Deforestation Regulation
16:38 | 18/12/2024 Industry
Construction industry expands at the highest rate since 2020: ministry
09:38 | 18/12/2024 Industry
Nghe An Southeast Economic Zone aims to attract 1 billion USD in FDI in 2025
12:33 | 21/12/2024 Investment
Boeing aims to expand investment and cooperation in Vietnam’s defense sector
17:00 | 19/12/2024 Investment
Can Tho attracts non-state investment
10:21 | 17/12/2024 Investment
FDI remains vital contributor to boost economic growth
09:06 | 13/12/2024 Investment
Year-end surge in property bond issuance amid financial challenges
09:39 | 20/12/2024 Finance-Banking
Vietcombank named most valuable brand in Vietnam
16:43 | 18/12/2024 Finance-Banking
Many banks increase deposit interest rates in year-end period
16:56 | 16/12/2024 Finance-Banking
Deputy PM urges extra efforts to remove Vietnam from money laundering grey list
15:16 | 13/12/2024 Finance-Banking
Vietnam likely to face continued turbulent weather systems in 2025
14:26 | 19/12/2024 Environment
Nature-based projects help Mekong Delta fight climate change
16:31 | 18/12/2024 Environment
11 rare monkeys released back into wild in Nghe An
09:27 | 18/12/2024 Environment
Master Plan on Sustainable Exploitation and Use of Coastal Resources announced
11:26 | 16/12/2024 Environment
Vietnam can partner with UK in developing nuclear power: Expert
12:43 | 21/12/2024 Science - Technology
Vinaphone launches fastest 5G service in Vietnam
12:38 | 21/12/2024 Science - Technology
Vietnam cooperates with Google to launch “Official Government Apps" feature
17:13 | 20/12/2024 Science - Technology
Two VNA newspapers rated "excellent" in digital transformation maturity
14:29 | 17/12/2024 Science - Technology
Aviation sector strengthens smuggling, commercial fraud and counterfeit goods control
09:49 | 22/12/2024 Society
How will green transformation roadmap for Ho Chi Minh City public transport be applied?
12:19 | 21/12/2024 Society
Vietnam aims high with global education integration scheme until 2030
16:36 | 20/12/2024 Society
HCMC - Trung Luong - My Thuan Expressway to be expanded
15:46 | 18/12/2024 Society
Viettel's hi-tech products meets standards for supply to Malaysia
13:19 | 21/12/2024 Vietnamese Brands
Hanoi promotes key industrial products
12:57 | 15/12/2024 Vietnamese Brands
Building a strong brand for Ha Giang’s thick-skinned orange
14:31 | 12/12/2024 Vietnamese Brands
2024 Vietnam Business Day opens shop in Japan
14:49 | 04/12/2024 Vietnamese Brands
Vietnam’s high-end fashion targets Chinese market
10:04 | 22/12/2024 Culture
Enduring tradition of Ha Nhi ethnic minority group's costumes
13:14 | 21/12/2024 Culture
Legendary band Boney M to thrill Vietnamese audiences this Christmas
14:49 | 17/12/2024 Culture
Ten prominent cultural, sports, tourism events in 2024 announced
14:39 | 17/12/2024 Culture
Two VNese destinations among cheapest places to live for digital nomads
13:10 | 21/12/2024 Tourism
Vietnam among top 3 destinations appealing to Australians
14:34 | 17/12/2024 Tourism
Ha Long Bay celebrates 30 years as a world heritage site
15:16 | 16/12/2024 Tourism
“Biet dong Sai Gon - Legendary Tunnels" tour launched
15:10 | 16/12/2024 Tourism