_MG_8660.JPG
Chips designed by the University of Technology – Vietnam National University in Ho Chi Minh City. Photo: TTBC

Vietnam holds several key advantages in developing high-tech sectors, particularly semiconductors. However, challenges in infrastructure, workforce readiness, and domestic market demand continue to prevent this potential from translating into true global competitiveness.

Strategic advantages in Vietnam’s favor

In late June 2025, Samsung’s mobile phone factories in Bac Ninh and Thai Nguyen celebrated the production of their 2 billionth device in Vietnam. The Korean conglomerate has also expanded its investments into chip production and R&D.

NVIDIA, with Chairman Jensen Huang calling Vietnam its “second home,” has signed agreements with the Vietnamese government to establish an AI R&D center and a data center.

Intel and Amkor are also increasing their footprint in the country. Amkor, one of the world's leading semiconductor firms, committed over $1 billion in additional capital in 2024 to expand its facilities in Bac Ninh.

These commitments - ranging from billion-dollar electronics manufacturing and chip testing and packaging complexes to the establishment of R&D centers focused on AI and chip design - are transforming Vietnam into a strategic hub within the global tech supply chain.

According to Dr. Nguyen Thai Chuyen, an international business lecturer at RMIT University Vietnam, the country has five standout competitive advantages in the high-tech space:

First, political and social stability give investors confidence to pursue multi-billion-dollar projects.

Second, Vietnam has a young, cost-competitive workforce with a growing pool of engineers. The country’s inclusion in the Global Innovation Index top 50 adds further appeal.

Third, its geographical location in the heart of Southeast Asia - a region responsible for a significant share of global semiconductor output - enhances Vietnam’s role in supply chain connectivity.

Fourth, generous tax incentives, such as four years of tax exemption followed by a 50% reduction for nine years, serve as a major draw.

Fifth, Vietnam has substantial rare earth reserves, bolstering its strategic position in the global tech landscape.

Chuyen also noted that Vietnam’s transition from labor-intensive assembly lines to high-tech industries, including AI and semiconductors, is a critical reason for the influx of tech “eagles” into the country.

The Vietnamese government’s semiconductor development strategy to 2030, with a vision toward 2050, aims to build a comprehensive high-tech ecosystem with the goal of reaching $50 billion in annual revenue by 2030.

Savills Vietnam Deputy General Director Troy Griffiths agrees, stating that the government is proactively pushing to become a central player in high-tech and semiconductor industries, evidenced by new policies promoting digital transformation and innovation.

Vietnam’s strategic location is also increasingly vital as global tech firms look to diversify supply chains and mitigate geopolitical risks.

“Compared to other countries in the region, Vietnam stands out due to its stability and clear policy orientation in high-tech development,” Griffiths emphasized.

Execution remains the weak link

dsc00777 1778.jpeg
Former Minister of Science and Technology Nguyen Quan at a public event. Photo: Tien Phong

Despite these advantages, execution remains a critical challenge. Former Minister of Science and Technology Nguyen Quan told VietNamNet, “Policy documents are often excellent, but implementation is where things fall apart.”

According to Quan, “Institutions are the bottleneck of bottlenecks.” Even groundbreaking resolutions are delayed or undermined during implementation due to inconsistent or missing guidance.

Taking Resolution 57 on breakthroughs in science, technology, innovation, and digital transformation as an example, Quan said timely and synchronized issuance of legal documents - from laws to decrees and circulars - is crucial to ensure practical enforcement.

Quan also identified three major challenges in developing Vietnam’s semiconductor industry:

First, infrastructure - especially energy - is lacking. Semiconductor manufacturing requires extremely high-quality electricity with stable voltage and frequency. Any disruption can damage sensitive processes or equipment.

Second, water - specifically ultra-pure water - is essential. Semiconductors are highly sensitive to micro-particles, and even the slightest impurities can cause defects and compromise chip quality.

Third, human capital is a major concern. Operating billion-dollar semiconductor facilities demands highly skilled technicians and engineers, which Vietnam is still working to develop.

“These are key reasons why foreign chipmakers remain cautious about investing in Vietnam,” Quan observed.

He also raised questions about market demand. While Vietnam seeks to attract domestic semiconductor ventures, no one has clearly answered who will buy these chips, and at what volume. Competing with major global firms that dominate the market won’t be easy.

“If a factory invests billions of dollars but fails to sell its products, it will quickly collapse. Production without sales means failure,” Quan warned.

He urged the government to not only attract investment but also help local companies secure domestic and global market access. Policies should encourage major multinational firms already operating in Vietnam to allocate a portion of their supply chain to local semiconductor firms.

To fully harness existing advantages and develop the high-tech sector, Dr. Nguyen Thai Chuyen added that incentives must be more targeted. Support shouldn’t stop at tax breaks - it should include R&D funding, intellectual property protection, and help for Vietnamese firms to join global supply chains.

Developing supporting industries is another must, he added. Vietnam should promote local participation in the semiconductor-electronics value chain to reduce reliance on imported materials.

Regarding workforce development, while the government has set a goal of training 50,000 semiconductor engineers by 2030, Chuyen believes stronger cooperation with foreign-invested enterprises is needed. This will help the next generation of engineers access cutting-edge technologies and meet real industry demands.

Chuyen cited South Korea’s success as a model: since the 1980s, the country has prioritized semiconductors as a key industry, implementing credit policies, investing heavily in R&D, and forming human capital strategies.

South Korea also proactively partnered with the US and Japan to acquire technology, train engineers, and license designs. At the same time, domestic firms like Samsung and SK Hynix were encouraged to build capacity and gradually master core technologies.

Tran Chung