According to research firm Technavio, the semiconductor market value in Vietnam will increase by about 1.65 billion USD in the period 2020 - 2025. (Source: Shutterstock)

Chipmaker's new destination

South Korean chip giant Hanmi Semiconductor announced the official launch of its Hanmi Vietnam branch in Bac Ninh City at the end of May. Hanmi Semiconductor CEO Kwak Dong-shin also emphasized the company’s commitment to providing tailored services to Vietnamese consumers through its local subsidiary and its team of professional sales and service engineers.

Established in 1980 to promote the development of Korea's semiconductor industry, Hanmi Semiconductor has steadily grown into a world-class semiconductor manufacturer and is now a leading designer, developer and manufacturer in the semiconductor equipment industry.

“We believe that Vietnam is emerging as a manufacturing hub for many semiconductor manufacturing companies, so Hanmi Semiconductor's market penetration could not be more timely,” said Mr. Kwak Dong-shin.

In early June 2023, Infineon Technologies AG (Germany's largest semiconductor solutions company for power systems and IoT) also announced the expansion of its operations in Vietnam and the establishment of an electronic chip development team working in Hanoi.

The announcement comes as Infineon opens a new office in Hanoi, which is larger in size and can accommodate up to 80 employees, focusing mainly on chip research and development (R&D), sales and marketing.

Mr. CS Chua, President and CEO of Infineon Technologies Asia Pacific believes that with a population of nearly 100 million and a young population structure, Vietnam is developing into a key market and a priority destination for multinational corporations in search of technical talent.

“Hanoi seeks to consolidate its position as an internationally renowned research and development centre, with potential to grow with Infineon’s centres in Germany, Austria, India and Singapore,” said CS Chua.

“Rising Star”

According to research firm Technavio, the semiconductor market value in Vietnam will increase by about 1.65 billion USD in the period 2020 - 2025.

The growing adoption of IoT and smart home technologies is driving the growth of the semiconductor market in Vietnam, and semiconductor manufacturing plants are being promoted to address the global shortage. Foreign companies, including Samsung, Hana Micron Vina, and Amkor Technology, among others, are actively investing in these projects.

Ms. Liu Xin, Marketing Director of Ibe Vietnam Laser Technology Co., Ltd. shared that although newly joined, Ibe Vietnam believes that Vietnam is a great country to invest in thanks to many positive factors, such as large market potential, support from local authorities... At the end of April 2023, the Company put the 15 million USD factory into operation after 3 years of construction.

A report by the Bank of Korea (BOK) in late May also highlighted Vietnam's rapid emergence as an important market for South Korean semiconductor manufacturers, as they grapple with falling demand in China due to the escalating US-China conflict.

BOK also optimistically assessed the potential of the Vietnamese market, with its abundant labor force with low wages, accessibility, and favorable geographical location… with the Chinese market. These factors are encouraging global businesses, including Korean businesses, to build production facilities in Vietnam.

Accordingly, Samsung Electronics has moved its smartphone and computer production facilities to Vietnam several years ago. Apple also moved parts of its iPad production line from China to Vietnam in June last year, while many sources said that Google is considering the relocation.

Dr. Nguyen Khac Giang from ISEAS - Yusof Ishak Institute said that by embracing the semiconductor industry development strategy, Vietnam has the potential to enhance its global position in the value chain, moving from a labor-intensive model to a technology-driven model. “This transformational change will help Vietnam realize its ambition of achieving a GDP per capita exceeding US$18,000 by 2045,” he said.

However, Mr. Giang emphasized the urgency of recalibrating the policy framework, promoting the enhancement of vocational training programs in the high-tech sector and enhancing support mechanisms for domestic enterprises.