Vietnam’s semiconductor industry is expected to grab a revenue of $20.5 billion at a CAGR of 11.62 percent from 2023 to 2027.
Vietnam has been undertaking a giant leap in transforming its semiconductor manufacturing industry by attracting global investments and unleashing numerous subsidy schemes. The nation has magnetized major international chip firms, including South Korea’s Hanmi and Germany’s Infineon Technologies.
Backed by a highly tech-oriented industrial development policy, experts believe Vietnam is following Malaysia’s journey. India, US, and Europe have been promoting the nation as an alternative to China for imports and manufacturing. Experts also added that Vietnam, furnished with advanced engineers, works at a meager wage. According to the Asia Times report, around $ 8,000 is paid to Vietnamese engineers yearly. At the same time, the figures of other nations include $34,000 in South Korea, $46,000 in Taiwan, $50,000 in Japan and $68,000 in Singapore.
Infact, the yearly wages for the design engineers, who are having less than three years of experience, ranges from $10,000-$15,000 compared to $65,000-$70,000 in the US. Due to this reason, Intel has set-up its biggest Integrated Circuit ATMP plant in Vietnam and also the largest cutting-edge 3D packaging unit in Vietnam.
Strategically, Vietnam’s alliance with the US, aimed at overshadowing China’s dominance in the global technology market, could prove highly beneficial. The onset of COVID-19, anti-China sentiments, ‘Chip 4 Alliance’, and ‘Necklace of Diamonds’ are playing a crucial role in developing the semiconductor ecosystem of various Asian countries, including Europe and the USA. Vietnam, along with India, has emerged as a preferred destination for global semiconductor companies, bolstering its position in the international chip industry.
The government of Vietnam is making significant strides in the development of its semiconductor industry. By training 50,000 engineers to benefit the industry at all stages of the value chain, Vietnam is demonstrating its commitment to growth. The nation’s semiconductor industry is anticipated to generate a revenue of $20.5 billion at a CAGR of 11.62 percent from 2023 to 2027, with a market value of $31.28 billion by 2027. Integrated Circuits are expected to contribute the most in Vietnam’s market at a projected value of $16,44 billion.
After Malaysia and Taiwan, Vietnam has emerged as the third spot in exporting semiconductor exports to the US. However, the challenge is when the entire supply chain is considered. Vietnam mainly works in the final phase of chip manufacturing and focuses on assembly, testing, and packaging. Therefore, the nation is proactively working on various strategies to perk up packaging and design potentials to augment its imperativeness in the international chip industry.
Japan’s Renesas, South Korean IC design companies BOS Semiconductors, Taiwan’s GUC and Faraday Technology mostly carry out design operations in Vietnam. The nation has its own semiconductor companies, dubbed FPT and VN Chip are also concentrating on the design. But the country craves ATMP/OSAT units and their fabs. Unreliable electricity with low subsidy margin, and a lack of clean water facilities are the areas the government is working on.
