Vietnam becomes key player in global chip value chain: deputy PM

Nguyễn Chí Dũng, deputy prime minister, said Việt Nam is becoming an important link in the global semiconductor value chain at a National Steering Committee meeting in Hà Nội.

He said the country is notably active in chip packaging and testing, and that authorities are improving the legal framework and creating favourable conditions to attract investment.

Ministries are implementing the national strategy for developing the semiconductor industry and the programme on developing human resources for the industry to remove bottlenecks and selectively attract foreign investment.

Foreign firms focus on assembly, packaging, and testing while Vietnamese companies move into chip design, and a semiconductor chip manufacturing plant project developed by the Viettel Military Industry and Telecoms Group (Viettel) has already commenced.

Nguyễn Chí Dũng, deputy prime minister, warned the sector lacks high-quality human resources, research and development capacity, and infrastructure, despite 166 universities offering related training and around 7,000 chip design engineers, more than 6,000 engineers, and over 10,000 technicians.

By March, Nguyễn Đức Tâm, deputy minister of finance, said FDI in semiconductors had reached nearly US$16 billion across 228 projects, with the Republic of Korea at 45.3%, the Netherlands 25.8%, and Singapore 12%. Nguyễn Chí Dũng urged building a full ecosystem, expanding high-quality human resources, boosting research and development, and deepening international cooperation.

🔗 Source: Vietnam News

🧠 Food for thought

Implications, context, and why it matters.

Vietnam is offering expanded incentives to build its chip ecosystem

New laws set a 5% corporate income tax rate for 37 years for projects investing from VND6 trillion (about $240 million) in semiconductor production, plus full exemption from land and water surface lease fees 1.
To cut upfront spending, Vietnam raised the age limit for importing used semiconductor production, packaging, and testing equipment from 10 to 20 years 2.
Investment is also flowing into nearby work such as an AI Factory (a large-scale data-center-style facility built to develop and run AI models) backed by a $200 million NVIDIA project with local firm FPT (a major Vietnamese technology services company) 3.
Vietnam also benefits from a large electronics base as Apple’s total investment through its supply chain since 2019 has reached about $16 billion, and industry forecasts said Vietnam was expected to supply around 65% of AirPods production by 2025 3.

Vietnam’s rise reshapes the global semiconductor back-end, but design ambitions face constraints

Vietnam is drawing companies shifting supply chains away from China and taking a “+1” role in diversification plans 1.
Current foreign activity clusters in assembly, packaging, and testing, with limited evidence of near-term moves into front-end chipmaking 1.
Growth in back-end capacity offers an alternative to Malaysia and the Philippines, which adds more split points across the global supply chain 4.
Vietnam targets 50,000 semiconductor engineers by 2030, yet universities graduate about 1,400 students a year in semiconductor-related fields 5.
The shortfall is sharpest in talent that can design and commercialize complete semiconductor products, which may keep Vietnam centered on back-end work 4.