Vietnam Bets Big on Chips

Vietnam is embarking on an ambitious mission to mint a large, highly skilled semiconductor workforce in a bid to capture a sizable share of the world's largest and most strategically vital manufacturing industry.

The concerted push, spearheaded by Vietnam's leadership, is aimed at seizing a "millennial opportunity," as termed by Planning and Investment Minister Nguyen Chi Dung, to gain an indispensable foothold in the semiconductor value chain as leading chip-producing economies vie for influence amid continued explosive growth and disruptions to established supply lines.

A colossal investment

At the heart of the effort is a mammoth $1.05 billion plan to train up to 50,000 semiconductor engineers, or more, by 2030. 

The multi-year human capital "project," proposed by Minister Dung at an international conference chaired by Prime Minister Pham Minh Chinh on April 24, represents an all-out blitz to rapidly cultivate semiconductor expertise in Vietnam.

It calls for developing 15,000 specialists in the critical field of integrated circuit (IC) design, another 35,000 engineers for other skill areas like packaging and testing, and around 5,000 experts at the vanguard of using chips to power artificial intelligence applications.

In total, the Vietnamese government itself would directly fund about $670 million of the $1.05 billion program over the next seven years. The remaining $380 million would be sourced from private enterprises, universities, and other public-private partnerships.

This eye-popping sum underscores just how bullish the leadership in Hanoi has become about semiconductors fueling economic growth and raising Vietnam's technological profile after decades of prioritizing more labor-intensive export industries.

Capitalizing on comparative advantages

With the semiconductor industry's global sales projected to reach $1 trillion annually by the end of this decade, and rising geopolitical friction reshaping supply chains, Minister Dung sees a unique window for Vietnam to capitalize on its comparative advantages and assert itself as an ascending strategic node for chipmaking.

Among those key strengths are its ample, cost-effective workforce - over half the population is under 30 and buoyed by some 1.8 million university graduates each year.

Complementing that is a relatively industry-friendly regulatory environment that has already attracted major semiconductor design and manufacturing service companies like Intel, Amkor, Renesas, Qorvo and Coherent.

Vietnam has also been steadily expanding its diplomatic and economic ties with all of the semiconductor powerhouses, including a joint statement with the U.S. last year specifically highlighting chip cooperation as a priority in their upgraded comprehensive strategic partnership.

Government's central driving role

For Vietnam's public and private sectors alike, however, executing this semiconductor human capital project will be a heavy operational and financial lift unlike any other workforce development initiative the nation has undertaken.

A central pillar is creating at least four "national shared semiconductor centers" equipped with costly, cutting-edge tools for R&D and training hosted at top universities across the country's three main regions of Hanoi, Ho Chi Minh City and Da Nang. An additional 18 more basic chip training centers would be established at Vietnam's technical colleges as well.

Constructing those facilities alone is expected to consume a significant portion of the $1.05 billion budget. But beyond physical infrastructure, staffing these centers with thousands of knowledgeable instructors and "at least 1,300 internationally qualified trainers" is poised to be an immense challenge requiring extensive overseas recruitment and retention efforts.

Throughout the implementation blueprint, the government is positioning itself to play a dominant, proactive driving role.

For example, the proposal calls for establishing a cabinet-level national steering committee for the semiconductor industry's development in Vietnam that will be chaired by the Planning and Investment Ministry.

Nearly every other major ministry, from education and science/technology to defense and foreign affairs, would be assigned oversight responsibilities for workforce training and industry support under this proposed top-down hierarchy.

The government itself would further underwrite the project's success through scholarships for semiconductor students, tax incentives, mandated industry-university partnerships, funding for R&D and chip startups, and potentially immigration policies to attract technical experts from abroad.

"The initial investment and support of the State is an important factor for the success of the semiconductor industry and the development of high-quality human resources for the industry," Minister Dung stressed.

A lightning-fast pivot

If implemented as outlined, the plan would mark a lightning-fast strategic pivot for Vietnam's vocational and higher education systems towards a new frontier industry unlike any it has seriously prioritized in the past.

The overwhelming majority of the 50,000 prospective chip engineers would be trained through "short-term, intensive" re-skilling and career conversion programs drawing graduates from existing closely aligned fields like electronics, IT and other technical disciplines.

This emphasis on rapidly minting new semiconductor specialists reflects both the urgency and scale of the demand Vietnamese authorities foresee emerging in the coming years.

While Vietnam has produced some graduates in semiconductor fields before, the programs have been relatively limited in scale and often seen as feeders into more established overseas education pipelines.

To quickly ramp up to the envisioned levels, the project calls for establishing standardized new semiconductor-focused curricula, majors and concentrations across universities.

Of critical importance will be equipping not just students but instructors with cutting-edge skills through boot camps, train-the-trainer programs and international faculty exchanges.

To facilitate this skills transfer, Vietnam is betting heavily on deepening industry-academia collaborations with leading U.S. firms like Cadence, Synopsys, Google and Meta - all of which have already partnered on pilot training initiatives.

Still, skepticism remains

For all the resolve and resources it plans to muster, Vietnam's semiconductor workforce aspirations are not without significant skeptics who view the country as a tertiary player bound to be overshadowed by the more established industry giants vying for chip primacy.

"Vietnam is trying but will have a tough time in terms of talent acquisition and retention. Its semiconductor dreams are great plans, very ambitious but will be extremely difficult to execute," a director at market analytics firm who declined to be identified, told Vietnam Economic Times.

Other analysts have pointed to Vietnam's comparatively miniscule government funding pledges so far compared to the $52 billion chips act marshaled by the U.S. or the nine-figure investments made in the past decade by global leaders like South Korea, China and the European Union.

At the same time, executives have cited hiccups in infrastructure as a potential hindrance compared to more mature chipmaking hubs, even as Vietnam actively upgrades transportation links, utilities and digital connectivity across the country.

And skeptics say the nation may lack the robust semiconductor research culture and patent portfolios to foster cutting-edge breakthroughs.

But as Planning and Investment Minister Dung conveyed, Vietnamese leaders have clearly made a high-stakes, calculated decision that they cannot afford to sit on the sidelines while the semiconductor industry fortunes are recast through the end of this decade and beyond.

The coming years will reveal whether this bold workforce investment gambit pays off - potentially turning Vietnam into an indispensable node in globalized chip production, or leaving it watching from the periphery.