On January 16, the Military Industry and Telecommunications Group (Viettel) officially broke ground on the construction of the first semiconductor chip manufacturing plant in Viet Nam, marking an important turning point for the country’s high-tech industry.

Gradually mastering high technology

According to the plan, Viettel will implement the project with the goal of completing construction, receiving technology transfer, and starting trial production by the end of 2027. During the 2028–2030 period, the project will focus on completion, process optimisation, and improving production-line efficiency in accordance with international standards. The plant at the Hoa Lac High-Tech Park is planned with an open orientation, ready for expansion in scale, gradually enabling Viet Nam to access advanced semiconductor technologies.

Speaking at the groundbreaking ceremony, Prime Minister Pham Minh Chinh said that the global semiconductor industry has reached a scale of approximately 2.3 trillion USD. This industry is no longer purely an economic sector, but has become a matter of geopolitics and national security, as well as a symbol of each country’s technological strength.

In Viet Nam, the Party and the State have early identified the semiconductor industry as a strategic breakthrough. Over successive periods, many important resolutions of the Politburo have gradually established the pivotal role of information technology, electronics, and telecommunications in national development.

Specifically, Resolution No. 36-NQ/TW (July 1, 2014) identified information technology as the “infrastructure of infrastructure”; Resolution No. 23-NQ/TW (March 22, 2018) regarded the information technology and electronics industry as the main pathway of industrialisation; Resolution No. 52-NQ/TW (September 27, 2019) continued to affirm this as a priority group of industries with a high level of readiness. With Resolution No. 57-NQ/TW (December 22, 2024), for the first time the Politburo identified semiconductors as a strategic technology that needs to be gradually mastered, creating an important political foundation for the development of the industry in the new period.

Along with this, the National Assembly has promulgated 12 laws to promote science and technology, innovation, and digital transformation, many of which are directly related to semiconductor industry development. The Prime Minister has also issued the Strategy for Semiconductor Industry Development to 2030, with a vision to 2050, along with programmes for human resources development and a list of strategic technologies.

After many years of efforts, Viet Nam’s semiconductor industry has achieved notable initial results: the formation of nearly 60 enterprises with chip design capabilities, including 13 domestic enterprises; becoming a hub for chip packaging and testing; being among the group of major countries exporting chips to the US; building a workforce of nearly 6,000 semiconductor engineers; and gradually developing research infrastructure at key higher education institutions.

Along with this, many leading global technology corporations such as Intel, NVIDIA, Samsung, Qualcomm, Marvell, Amkor, and, most recently, ASML have stepped up investment and cooperation in Viet Nam, enabling the country to participate more deeply in the global semiconductor value chain.

However, according to the Prime Minister, Viet Nam’s semiconductor chip industry still lacks a critical link: chip manufacturing capacity. The groundbreaking of a high-tech semiconductor chip fabrication plant therefore carries particularly important significance, affirming the ability to gradually master high technology and complete the domestic semiconductor value chain.

The need to deploy comprehensive support mechanisms

Viet Nam is undergoing a strong shift from the role of a traditional manufacturing and assembly destination towards developing endogenous capabilities and gradually participating in stages with higher added value. To promote this process, the Government has issued many breakthrough incentive policies for the semiconductor sector.

Specifically, chip manufacturing investment projects with a scale of 6 trillion VND or more are entitled to a preferential tax rate of 5% for 37 years, tax exemption for the first six years, and a 50% reduction for the following 13 years; full exemption from land rental fees; and personal income tax exemption for high-quality human resources for five years.

However, according to Dr Bui Xuan Minh, Head of the Semiconductor Design and Industry 4.0 Research Group at RMIT University Viet Nam, domestic enterprises such as Viettel, FPT, VNChip, and CT Semiconductor currently mainly participate in the semiconductor industry in the design and packaging and testing segments. The biggest barrier in the design segment is the shortage of highly specialised human resources and research and development (R&D) experience, especially in integrated circuit design, simulation, and testing.

The main causes stem from the complexity of the field of study and the previously limited employment opportunities. The cost of investing in laboratories and design software licences is very high, ranging from 500 million to 1 billion VND for a prototype chip with an area of 1 mm². In addition, current incentive policies and intellectual property protection mechanisms for R&D activities are not yet attractive enough to draw global design centres.

In fabrication and manufacturing, investment requirements are estimated at more than 2 billion USD for 14 nm technology and more than 10 billion USD for advanced chips below 3 nm. Viet Nam is also lacking a specialised supply chain for materials and logistics systems for chip production. In addition, geopolitical factors and policies to protect core technologies by home countries continue to be major barriers.

In this context, the State needs to deploy comprehensive support mechanisms, based on domestic conditions and the experience of countries that have gone before, such as Japan, the Republic of Korea, Taiwan (China), and Singapore.

Technology transfer through negotiation and access to design tools, alongside the completion of the legal framework for semiconductor intellectual property, cannot be achieved without the role of the State. Human resource development needs to be strengthened through training programmes and practical chip design activities closely linking enterprises and universities. In addition, market demand should be stimulated by prioritising the use of domestically produced chips in projects involving artificial intelligence (AI), the Internet of Things (IoT), manufacturing, energy, electric vehicles, and defence.

“Viet Nam needs a three-pillar strategy comprising finance, technology, and human resources, linking startups, research institutes, universities, and enterprises into a national semiconductor ecosystem,” Dr Bui Xuan Minh emphasised.