Da Nang on way to become a Semiconductor and AI Hub

Da Nang hosted its first-ever Semiconductor Da Nang Day 2024 (Semicon Da Nang 2024) on August 30, marking a significant milestone for both the city and central Vietnam. The Day, which included a Da Nang Semiconductor Investment Promotion Conference, attracted hundreds of industry experts and is seen as a driving force for the city’s ongoing development.

Conference participants explored Da Nang’s potential and competitive advantages in the semiconductor industry, discussing actionable strategies the city should pursue to harness these strengths.

Ms. Susan Burns, the US Consul General in Ho Chi Minh City, highlighted Da Nang’s rising global profile in the semiconductor sector, citing its strategic location and highly-skilled workforce. The US acknowledges the critical importance of boosting the supply chain and seeks to strengthen its collaboration with the city in the semiconductor space. “The most crucial element for Vietnam is developing a world-class workforce,” she remarked. “The US is committed to supporting Vietnam in addressing current challenges in the semiconductor industry and building a sustainable, innovative ecosystem.”

Meanwhile, Mr. Trinh Khac Hue, General Director of Qorvo Vietnam, described Da Nang as an ideal location for the development of a semiconductor industry and is currently in discussions with the city on future projects. The foundation of Da Nang’s success will be its ability to cultivate a high-quality engineering workforce. Ongoing training efforts will position Da Nang as a leading semiconductor design hub in Vietnam and eventually on a global scale.

Mr. Le Quang Dam, General Director of Marvell Technology Vietnam, emphasized that a skilled workforce is the most important factor in advancing Vietnam’s semiconductor industry, particularly in Da Nang. He advocated for stronger collaboration between businesses and universities to foster talent development and share expertise in cutting-edge technologies, arguing that such partnerships are essential for competing with global players.

Developing human resources

Mr. Nguyen Van Quang, Secretary of the Da Nang City Party Committee, said that, most recently, the National Assembly (NA) passed and issued Resolution No. 136/2024/QH15 dated June 26, 2024, on the organization of urban government and the piloting of a number of specific mechanisms and policies for Da Nang’s development, including preferential policies to encourage investment and development in the semiconductor and AI fields. The Resolution provides special policies for the two fields, with Da Nang being the first to receive such benefits. Policies include personal income tax exemptions, training cost support, incentives to attract experts and scientists, and assistance in equipment procurement.

“Da Nang will create the most favorable conditions possible for investors and businesses to develop the semiconductor industry,” he confirmed. “Specifically, the city is actively creating an environment that encourages businesses to engage in developing the workforce for the semiconductor industry.”

City leaders view investment in semiconductors and AI as long-term and sustainable and not a short-term measure. While complex, these fields are seen as new growth engines for the city’s future.

Da Nang’s focus on high-tech development is the culmination of over 20 years of strategic planning, starting with key resolutions in 2000 and 2003 aimed at growing the software industry and digital economy. Today, Da Nang is home to ten semiconductor design companies, including Synopsys, Uniquify, and FPT Semiconductor, with around 550 engineers trained locally. It now accounts for nearly 10 per cent of Vietnam’s semiconductor design workforce.

Additionally, Da Nang boasts 2,450 digital technology companies, with an average of 2.3 tech businesses per 1,000 people, or three-times the national average and ranking it second nationwide after Ho Chi Minh City. Its total digital workforce numbers 46,000 people. According to the Ministry of Information and Communications, Da Nang’s digital economy contributed 19.76 per cent of the city’s gross regional domestic product (GRDP) in 2022. The city’s goal is for the digital economy to account for at least 30 per cent of GRDP by 2030.

Da Nang also has 37 institutions providing training in IT and for semiconductor-related talent, graduating 5,700 students annually. Local universities closely collaborate with semiconductor companies to ensure training meets industry needs. Since August 2024, three universities - the Vietnam-Korea University of Information and Communication Technology, the Da Nang University of Science and Technology, and the Da Nang University of Technical Education - have offered nearly 200 new slots a year for semiconductor design engineers, representing a key resource for the city’s future in the field.

Collaboration and partnerships in training

Standing Deputy Chairman of the Da Nang City People’s Committee Ho Ky Minh emphasized that human resources are the “nucleus” of the city’s semiconductor industry. By 2030, it aims to become one of Vietnam’s top 3 semiconductor hubs, developing a skilled workforce and an integrated semiconductor ecosystem.

In particular, the city plans to train and attract 5,000 skilled workers, including 2,000 in design and 3,000 in testing and packaging, and aims to attract at least 20 semiconductor companies, including one or two specializing in packaging and testing.

Following the elevation of Vietnam-US relations to a Comprehensive Strategic Partnership in September 2023, which focused on semiconductor development, Da Nang accelerated its efforts to develop semiconductor talent through partnerships with major global companies. In late 2023 and early 2024, city officials met with top semiconductor firms like Synopsys, NVIDIA, Marvell, Intel, and Qualcomm. During APEC 2023 in the US, Da Nang signed a Memorandum of Cooperation with Synopsys.

The city also established the Semiconductor and AI Design Research and Training Center (DSAC), which opened last January. This is Vietnam’s first center focused on semiconductor and AI investment, research, training, and international collaboration, with partnerships already secured with Synopsys and Intel.

Since these efforts, major companies such as Synopsys, Intel, Qualcomm, Marvell, and NVIDIA have evaluated Da Nang’s investment potential. They have shown keen interest in collaborating on infrastructure and workforce development to meet both the city’s and their own workforce needs in semiconductors and AI.

Da Nang’s human resources strategy is aligned with the demands of current and prospective investors, aiming to provide internationally-trained talent for both local and global companies. The city has already initiated semiconductor training programs, including a course for 25 university lecturers. It has also organized three engineer transition courses for 39 students and provided further training for 43 lecturers in the field.

In the fourth quarter of this year, it plans to select top lecturers for advanced training at Sicada Academy in Taiwan (China). The city is also collaborating with major corporations like NVIDIA, Qualcomm, and ARM to launch innovation programs and develop talent in semiconductors and AI. Da Nang has also identified several international universities experienced in meeting industry standards to partner with local institutions to elevate the quality of its semiconductor workforce training.

Implementing preferential policies

In accordance with NA Resolution No. 136 on urban governance and the piloting of special policies, Da Nang is actively formulating policies to attract investment and promote growth in the semiconductor and AI industries.

The Resolution provides substantial incentives for strategic investors and partners, including corporate and personal income tax exemptions, support for training and development, assistance with equipment purchases, and direct leasing of infrastructure assets without public bidding. Additionally, it allows for the direct procurement of specialized equipment from strategic partners in semiconductors and AI.

To qualify for these incentives, investors must meet specific criteria related to capital, revenue, and technology, and must also commit to long-term collaboration with the city in workforce training, technology transfer, and business expansion. These policies are expected to play a crucial role in drawing both domestic and international investments to Da Nang’s semiconductor and AI sectors.

To implement Resolution No. 136 effectively, the Da Nang City Party Committee has issued directives allocating specific responsibilities to local agencies, ensuring close collaboration with central ministries for smooth execution.

Mr. Minh said the city is quickly finalizing detailed support regulations to make these incentives operational by early 2025. The goal is to create an environment conducive to fostering semiconductor and AI education, attracting experts, facilitating technology transfer, and supporting businesses in these sectors across the city.