The establishment of chip manufacturing plants requires significant investment. Instead of focusing solely on the manufacturing process, Vietnam should consider specializing in the "software" aspect, specifically in chip design.

Chip design

Four years ago, Apple introduced the A14 Bionic chip for the iPhone, the first chip produced using 5nm technology. Despite its small size and modest energy consumption, this chip contains a staggering 11.8 billion transistors - equivalent to 134 million transistors per square millimeter. It can perform up to 11 trillion calculations per second.

Interestingly, while Apple designs the chip, it outsources the manufacturing to TSMC. This is why Apple is regarded as a leading chip producer, yet it operates as a fabless company - meaning it designs chips without having its own fabrication facilities.

To simplify, the chip industry can be divided into fabless companies (like Apple) and fabs (like Intel). Fabless companies handle design and layout, while fabs manufacture the chips.

This presents an opportunity for Vietnam to carve out its own niche in the semiconductor industry. Opening chip manufacturing facilities involves substantial investment in advanced technology, which is not only expensive but also requires skilled engineers. Therefore, rather than solely focusing on manufacturing, Vietnam should prioritize design.

Apple's chips fall into the ASIC (Application-Specific Integrated Circuit) category, which are made for very specific purposes. Once programmed, they run their designated programs throughout their lifespan. These chips are designed to be extremely efficient, powerful, durable, and energy-saving, but their design can take years and hundreds of millions of dollars. Manufacturing these chips is also costly, necessitating large production volumes to reduce unit costs. Producing them in smaller quantities can lead to exorbitant costs, as seen with NVIDIA's graphics or AI chips.

Apple's mobile chips, NVIDIA's graphics chips, Bitmain's Bitcoin mining chips, and Intel's machine learning acceleration chips are all ASICs. The design process for these chips consists of several stages that Vietnam might not be able to participate in immediately. However, there are stages, such as chip layout design, that China may not engage in due to concerns about contract negotiations with major companies and its overall performance.

Stages of chip design

Chip design is often tedious and labor-intensive. The initial phase, known as logic design, is somewhat abstract but bears resemblance to programming in high-level languages - an area where many Vietnamese are skilled.

The operation of semiconductor chips involves turning numerous logic gates on and off, corresponding to binary signals (0s and 1s). For instance, designing a very simple chip that performs binary addition requires programming the logic gates to respond correctly to input signals, like 0101 and 0011, resulting in an output of 1000.

The first stage of chip design involves programming these logic gates to function correctly. A chip can have millions of gates and needs to perform a multitude of complex tasks.

To achieve this logic design, a hardware description language (HDL) is employed. Currently, two common languages are VHDL and Verilog.

Vietnam has a strong software background and is particularly skilled in programming - an essential skill for the semiconductor industry. This could be a viable pathway for Vietnam to integrate into the global chip manufacturing landscape.

Once the "logic design" is established in HDL, expensive software tools are required for simulation. This process translates the high-level design into a lower-level format to test whether it functions as intended and to identify any bugs.

After successful simulation, the next step is logic synthesis, converting the entire design into a virtual circuit comprising logic gates and transistors or generating virtual bitstreams. The software used for this purpose requires licenses from major companies like Intel, Cadence, or AMD, costing hundreds of thousands of dollars annually.

The synthesized design is then transferred to the physical layout stage, akin to creating blueprints for machinery or buildings, preparing it for production. This stage is labor-intensive as it optimizes the placement of circuits and transistors within the physical constraints of the chip.

Production and market dynamics

In an unstable world, the ability to manufacture telecommunication and military chips provides a significant advantage. The layout stage is currently outsourced by major chip companies, with India emerging as a leading contractor for logic design using HDL and code verification. Vietnam could become a crucial player as trust in China diminishes among American chip manufacturers.

In 2021, it was reported that a semiconductor chip is sold every second, amounting to 145 chips per second. Like shoes or clothing, chip designs continuously evolve, indicating a substantial demand for layout outsourcing and chip design services. But what type of chip design should Vietnam pursue?

In addition to complex ASIC chips like those from Apple and NVIDIA, there's also the FPGA (Field-Programmable Gate Array) type. Unlike ASICs, which are programmed once for a specific purpose, FPGAs can be reprogrammed for various applications.

FPGAs have the drawback of being larger and consuming more power, but their design and production are rapid and flexible. They can be reprogrammed for different uses, from telecommunications equipment to household appliances, even guiding missile systems.

Despite being more expensive than ASICs—costing around $5,000 per chip compared to ASICs that may only cost a few dozen dollars with large production runs - FPGAs are advantageous for small-scale, high-security applications like drones or military equipment.

FPGAs have diverse applications, ranging from smart home devices to telecommunication equipment (5G networks, routers, modems) and healthcare to security devices. AI systems, machine learning, and high-performance computers also utilize FPGAs for their flexibility and the need for rapid changes in algorithms.

With significant potential, the FPGA chip design field presents an opportunity for Vietnam, as few nations can excel in this area.

The FPGA technology emerged later than ASICs, becoming widely adopted in the 1980s. Major FPGA manufacturers, Altera and Xilinx, were both acquired by tech giants Intel and AMD.

The military, financial, and aerospace sectors increasingly utilize FPGAs, particularly in communication devices. The FPGA market was valued at $2.75 billion in 2010 and grew to $9.8 billion by 2020, with projections to reach tens of billions in the coming years.

Participating in various stages of FPGA chip design could help Vietnam swiftly close the gap in production capabilities. Producing "low-end" chips is relatively straightforward, with lower investment requirements. Chips used in household appliances like rice cookers and washing machines are not overly complex to manufacture. Even military chips do not require the sophistication of Apple’s A14 Bionic.

Military chips do not need to handle muli-tasking or large data processing at high speeds, as in gaming or video calling, nor do they require energy efficiency to the same extent as smartphone chips.

In an unstable world, the ability to manufacture telecommunication and military chips is a significant advantage. This underscores the need for a skilled team of engineers with practical experience to expedite the development of specialized chips and ensure their safe and secure operation, designed in such a way that, if the technology falls into adversaries' hands, it is challenging to replicate.

Nguyen Phuong Van