Vietnam is rapidly positioning itself as a significant player in the global market of semiconductors. This vision is supported by the strategic government initiatives, substantial foreign direct investment (FDI), and growing global demands for semiconductors across various sectors. The country is making notable strides in this high-tech arena. Vietnam’s semiconductor supply chain will have a projected market value of $ 31.28 billion by 2027 and a compound annual growth rate (CAGR) of about 11.6 % between 2023 and 2027.
Vietnam faces tough competition from regional powers like Taiwan, Malaysia, and South Korea. All these states are well-established in the semiconductor supply chains. For example, Malaysia has been expanding its semiconductor manufacturing capacity significantly in packaging and testing services. As of 2024, Vietnam’s semiconductor industry has generated approximately $18.23 billion in revenue, which was primarily because of FDI enterprises. Major global semiconductor companies, including Intel, Amkor Technology, and Hana Micron, have established substantial operations in the country. Amkor, for instance, is investing over US$1.6 billion in an advanced packaging plant in Bac Ninh Province, which is expected to produce 3.6 billion units annually. Similarly, Hana Micron plans to invest around US$930 million by the year 2026 to expand its chip packaging facilities.
In this regard, important progress happened in September 2024 when Vietnam’s Prime Minister Pham Minh Chinh signed Decision No. 1018/QD-TT. It primarily outlines Vietnam’s semiconductor industry development strategy through 2030. This vision is to extend this industry by 2050. This ambitious strategy is set to develop the entire semiconductor value chain. It also includes research, design, manufacturing, packaging, and testing. The short-term goal of the strategy is that by 2030, Vietnam’s target is to establish at least 100 design companies. This also includes establishing a semiconductor manufacturing plant along with ten packaging and testing facilities. In the longer term, the goal is to position Vietnam among the world’s leading semiconductor nations with expected annual revenue that exceeds US$100 billion by 2050.
Sectoral opportunities in the overall progress of the country incorporate the automotive and electric vehicle (EV) industry. Vietnam’s expanding EV market is a major contributor to semiconductor demand. Domestic manufacturers such as VinFast, along with global players like Audi, Mercedes-Benz, and BYD, are accelerating their presence in the country. Globally, EV sales surged 35% year-on-year, and by 2035, EVs are expected to account for 50% of all new car sales. Given that EVs rely heavily on advanced semiconductors for power management, connectivity, and automation. The EV boom in Vietnam is significantly boosting its semiconductor industry.
Besides the EV market, the AI ecosystem of Vietnam is also evolving swiftly and contributing as another sectoral opportunity to boosting Vietnam’s economy. FPT (Financial and Promoting Technology) Corporation announced a US$200 million AI Factory, built in collaboration with Nvidia. It is aimed at boosting Vietnam’s AI and semiconductor capabilities. Additionally, the surge in demand for data processing, machine learning, and edge computing technologies further reinforces Vietnam’s potential in semiconductor manufacturing.
Workforce shortage is another challenge. Vietnam currently has approximately 6,000 semiconductor engineers. However, according to estimates from Vietnam’s Ministry of Information and Communications, the country’s annual demand for IT and digital engineers is about 150,000. Whereas the current educational system is meeting just 40-50% of this need. In response, by the year 2030, the government has launched initiatives aiming to train about 50,000 semiconductor engineers. As far as infrastructure is concerned, the country needs urgent upgrades to match the demands of high-precision semiconductor manufacturing. Even brief power outages can result in multi-million-dollar losses. Industrial parks such as Saigon Hi-Tech Park are beginning to secure independent energy sources, but widespread energy resilience remains a challenge.
Vietnam’s semiconductor industry is poised for robust expansion and is no accident. It is driven by government backing, strategic foreign partnerships, and increasing global demand. Its geographical proximity to China, competitive labor costs, and political stability provide key advantages. Global trade tensions have pushed companies to diversify supply chains. For Vietnam, stable and open trade has become a top choice. Major players now invest in factories and R&D centers here, which is ultimately boosting local expertise. Without any doubt, Vietnam is on track to become Asia’s next semiconductor powerhouse. Success will hinge on the country’s ability to quickly upgrade its infrastructure, cultivate a larger skilled workforce, and differentiate itself amid intense regional competition.
