I. Overview of the semiconductor and electronic components industry in Vietnam
The semiconductor and electronic components industry plays an important role in Vietnam's economy, especially in the context of digital transformation and technology development. Semiconductors are the basis of all modern electronics, from cell phones, computers, cars to medical devices. This industry helps Vietnam increase added value in production, from processing components to producing high-tech products.
Vietnam is becoming an important center for manufacturing and processing electronic components, with the participation of large corporations such as Samsung, Intel and Foxconn. The scale of the semiconductor industry is growing strongly thanks to international investment and the development of domestic companies. The potential for developing the semiconductor industry in Vietnam is still large, especially when our country has the advantage of low production costs and good connectivity with the global supply chain.
II. The importance of the supply chain in the semiconductor industry
The semiconductor supply chain is a complex system that includes the production, assembly, distribution and consumption of semiconductor components, from microchip production to finished products. This is a core factor in maintaining the stability and growth of the global semiconductor industry.
An efficient semiconductor supply chain helps minimize production costs, optimize production and distribution processes, thereby supporting the development of electronics businesses. In Vietnam, the supply chain in the semiconductor industry is still weak and dependent on imported raw materials, but has begun to experience significant development thanks to the participation of large corporations and investment from governments. This creates huge opportunities for building more sustainable and autonomous supply chains.
III. Starting point of the semiconductor supply chain in Vietnam
In the early 2000s, the semiconductor and electronic components industry in Vietnam relied mainly on imports and foreign technology. Vietnam does not have a strong semiconductor industry base, and most electronic components must be imported from countries such as China, Korea or Japan.
Major barriers to semiconductor industry development include lack of capital, outdated technology, and highly technical human resources. The government and domestic companies do not have enough resources to invest in building a semiconductor supply chain from scratch. However, these difficulties have gradually been overcome through policies to attract investment and international cooperation, thereby creating a foundation for the development of the semiconductor industry in Vietnam.
IV. Factors promoting semiconductor supply chain development in Vietnam
One of the important factors promoting the development of the semiconductor supply chain in Vietnam is the support policy from the Government. Tax incentives, investment in infrastructure and support for technological research have created a favorable environment for businesses in the industry.
In addition, investment from multinational corporations such as Samsung, Intel and Foxconn is also an important factor helping Vietnam improve its production and processing capacity of electronic components. The advantage of low production costs and abundant labor resources has created opportunities for businesses in the Vietnamese semiconductor industry to compete in the global market.
V. Important milestones in Vietnam's semiconductor industry
Vietnam's semiconductor industry has achieved a number of important milestones, especially the participation of foreign direct investment (FDI) projects. Intel is one of the first corporations to invest heavily in the semiconductor industry in Vietnam. In 2006, Intel built a microprocessor factory in Tan Thuan, Ho Chi Minh City, marking an important step in the development of the semiconductor industry in Vietnam.
Foxconn, a major manufacturer of electronic components and electronic equipment from Taiwan (China), began operations in Vietnam in 2019. 2007. This company has built manufacturing factories in industrial parks in Bac Ninh and Hai Phong, specializing in providing components for big brands such as Apple, Sonyand Microsoft. Expanding operations in Vietnam has helped Foxconn not only improve production capacity but also promote the development of domestic supporting industries.
After Intel and Foxconn, Samsung is another large corporation with a strong presence in Vietnam. Samsung Electronics has built manufacturing factories in Bac Ninh and Thai Nguyen since last year 2009, shifting production of advanced electronic devices such as microprocessors, memory, and other components.
With large investment and continuous development of production facilities in Vietnam, Samsung contributes to helping Vietnam enhance its position in the global supply chain of the electronics and semiconductor industry.
Luxshare, one of China's leading electronic components manufacturing companies, has also been present in Vietnam since 2018. Luxshare stands out as an important partner of Apple in providing components such as cables, chargers, and mobile phone parts. The company has built production factories in Bac Giang and northern provinces of Vietnam.
Recently, December 2024, NVIDIA, one of the world's leading chip manufacturers, has signed a strategic cooperation agreement with the Government of Vietnam to develop the semiconductor industry in this country. This cooperation not only helps transfer advanced technology from NVIDIA but also opens up strong development opportunities for supporting companies in the semiconductor field in Vietnam. NVIDIA is committed to investing in research and development, improving production capacity and creating more job opportunities for Vietnamese people.
VI. Human resources in the semiconductor industry - Challenges and opportunities
Highly technical human resources are the decisive factor in the development of the semiconductor industry in Vietnam. However, currently, Vietnam is facing a big challenge in training human resources with highly specialized skills in this field. Universities and research institutes have not met the industry's need for experts in the field of semiconductors and electronic technology.
However, international cooperation and special training programs are opening up great opportunities. International corporations such as Intel, Samsung and Foxconn have also invested in human resource training in Vietnam. This is an opportunity to help improve the quality of human resources, while enhancing the competitiveness of Vietnam's semiconductor industry in the future.
VII. Vietnam's position in the global supply chain
Vietnam is gradually becoming an important electronic components manufacturing center in Southeast Asia. Compared to countries such as Thailand and Malaysia, Vietnam has proven itself to be an attractive location for investors in the semiconductor industry thanks to its low production costs and favorable investment environment.
Although still dependent on imported raw materials and technology, Vietnam has gradually increased added value in the semiconductor supply chain. Investment projects from large corporations, along with the development of supporting industries, help Vietnam play an important role in the global supply chain.
VIII. Opportunities from the trend of shifting global supply chains
The trend of shifting the supply chain from China to other countries, including Vietnam, brings great opportunities for the Vietnamese semiconductor industry. The trade war between the US and China and free trade agreements (FTAs) have created the impetus for this shift. Vietnam has an advantage thanks to low labor costs, an attractive investment environment and the ability to connect with global supply chains.
This not only helps Vietnam increase semiconductor export turnover but also creates opportunities for domestic businesses to participate in international supply chains. However, this also poses challenges to the quality and competitiveness of Vietnam's semiconductor industry.
IX. Domestic enterprises and participation in the supply chain
In recent years, domestic enterprises have also begun to participate in the semiconductor supply chain, however, they still encounter many challenges in technology, production scale and competitiveness. Enterprises such as FPT, CMC and Vingroup have made efforts to improve product quality and build brand position in the industry.
Despite significant participation, domestic enterprises are still facing some major challenges in the semiconductor industry, including:
- Công Nghệ: One of the biggest challenges that domestic businesses face is the ability to access and apply modern technology. The semiconductor industry requires a large amount of investment in research and development (R&D), which creates difficulties for domestic companies, especially when they do not have enough resources like multinational corporations.
- Production Scale: Domestic enterprises still face difficulties in expanding production scale to meet the increasing demand of the global market. The production of semiconductor components requires sophisticated processes and technology, so the lack of modern technology and equipment makes the productivity and product quality of domestic enterprises unable to achieve the same as international competitors.
- Competitiveness: International enterprises such as Intel, Samsung, Foxconn and Luxshare with large resources and advanced technology are dominating the market. This makes it difficult for domestic companies to compete on price, quality, and ability to supply quickly.
Although difficulties still exist, with support from the Government and preferential tax policies, domestic businesses have the opportunity to develop stronger in the semiconductor supply chain. The key to success lies in improving production capacity and accessing new technologies.
X. Supporting industries in the electronic components supply chain
Supporting industries play an indispensable role in the semiconductor and electronic components supply chain. Companies that produce auxiliary components such as wires, assemblies, and other materials contribute to the optimization of manufacturing processes, helping to reduce costs and improve production efficiency. Especially in the semiconductor industry, the strong development of supporting industries will create favorable conditions for key semiconductor component manufacturers, helping to promote the sustainable development of this industry in Vietnam.
The role of supporting industries in the semiconductor supply chain
Supporting industry in the field of electronic components includes enterprises that produce auxiliary parts such as wires, assembly components, insulating materials, circuit boards, etc. These products play an important role in ensuring the stability and efficiency of the semiconductor manufacturing process.
- Conductors and insulating materials: These are indispensable components in the structure of semiconductor components, helping to connect and protect electrical circuits, while ensuring the operation of electronic components in electronic devices.
- Assembly and protective cover: These parts help protect semiconductor components from environmental impacts and ensure long-term durability of electronic products.
The development of supporting industries in Vietnam
In recent years, the supporting industry in Vietnam has developed strongly along with the growth of the entire semiconductor industry in Vietnam. Supporting component manufacturing enterprises, especially domestic enterprises, have made significant strides in providing components and materials for the semiconductor industry. A number of domestic companies have begun to participate in the electronic components supply chain, meeting the growing needs of large domestic and foreign semiconductor companies.
- Increase the number of businesses: Enterprises manufacturing accessories such as wires, assembly components, and protective covers have joined the semiconductor supply chain, helping to increase product diversification and improve the quality of Vietnam's electronic products.
- International cooperation: Many Vietnamese businesses have signed cooperation agreements with international partners, especially large companies in the semiconductor industry, to provide high quality auxiliary components for semiconductor manufacturing projects.
XI. Infrastructure and logistics in the semiconductor supply chain
Infrastructure and logistics are essential elements in operating an efficient semiconductor supply chain. A modern transportation system, optimally managed warehouse centers and a strong logistics network help reduce transportation time and costs, thereby increasing production efficiency and enhancing the competitiveness of Vietnam's semiconductor industry.
In recent years, the Vietnamese Government has invested heavily in improving transportation and logistics infrastructure. Projects such as highway construction, seaport upgrading and railway network development have been implemented, especially in areas with many industrial parks and large production centers such as Binh Duong, Dong Nai and Hai Phong. This not only supports the transportation of electronic components but also encourages international investors to feel secure in expanding production in Vietnam.
However, there are still many limitations that need to be overcome. For example, warehouse systems for high-value electronic components are not properly developed, and the application of advanced technology in logistics management is limited. Investing in smart logistics solutions, such as integrated supply chain management systems and automation technology, will help the semiconductor industry operate more efficiently and meet the increasing demands of large technology corporations.
Improving infrastructure and logistics not only brings a competitive advantage but is also an important factor for Vietnam to become an important link in the global semiconductor supply chain.
XII. Technology and innovation in the semiconductor supply chain
Applying 4.0 technology to production and supply chain management is an inevitable trend in the semiconductor industry. Technologies such as artificial intelligence (AI), Internet of Things (IoT), and blockchain are helping to optimize manufacturing processes and supply chain management. Vietnam is also focusing on developing this technology in industrial parks producing electronic components.
The potential from these technologies will help Vietnam improve labor productivity, reduce costs and create high-quality electronic products. Businesses need to increase investment in technology and innovation to maintain a competitive position in the global supply chain.
XIII. The Government's role in supply chain development
The Vietnamese government has played an important role in supporting the development of the semiconductor industry through tax incentives, investment in infrastructure and support for technology research. Flexible tax policies and specialized industrial zones have created favorable conditions for businesses in the semiconductor industry to invest and expand production in Vietnam.
Technology investment is also one of the Government's top priorities, especially in developing supporting industries and high-tech human resources. The government needs to continue to support businesses in the semiconductor industry for this industry to develop more sustainably.
XIV. Export market and growth of Vietnam's semiconductor industry
Vietnam's semiconductor industry is recording outstanding growth, especially in electronic component export turnover. Electronic component products "Made in Vietnam" are present in many major markets such as USA, European Union (EU)and Japan, thanks to increased investment from multinational corporations and continuous product improvement strategies of domestic enterprises.
According to statistics, Vietnam's electronic components export industry will rank 9th in the world in semiconductor export turnover by 2022.. With an export value reaching billions of dollars each year, this industry has contributed significantly to the national GDP, becoming one of the key industries in Vietnam's economic development strategy. This affirms Vietnam's increasingly important position in the global semiconductor supply chain.
XV. Big challenge that Vietnam's semiconductor industry faces
Vietnam's semiconductor industry is facing many great opportunities, but also faces a number of significant challenges that need to be resolved to continue sustainable development.
Lack of highly qualified human resources
One of the biggest challenges of Vietnam's semiconductor industry is the shortage of highly technical human resources. The semiconductor industry requires a team of engineers and experts with deep expertise in areas such as circuit design, semiconductor manufacturing, and high-tech operations. However, the education and training system in Vietnam currently does not meet the quantity and quality of human resources needed by this industry.
Businesses also have difficulty attracting international talent due to the highly competitive environment from more developed countries in the region, such as Singapore, South Korea and Japan. Besides, retaining technical human resources in Vietnam is also a big challenge as they often look for better job opportunities abroad.
GLA HR's role in providing human resources for the electronic components and semiconductor industry
GLA HR Company is one of the pioneers in providing high quality human resources for the electronic components and semiconductor industry in Vietnam. With a widespread network and team of experts, GLA HR supports businesses in recruiting, training and developing highly qualified human resources to meet the increasingly stringent requirements of the industry.
Main services of GLA HR
- Personnel supply:
- The candidate data warehouse is engineers and department heads with high professional qualifications suitable for positions such as PQA, SQE, ME, PE, SMT.
- The candidate database is good at using foreign languages such as English, Chinese, Korean, and Japanese.
- Database of candidates working in Taiwan and China
- Database of candidates studying at vocational centers, study abroad, and international training.
- Personnel training:
- Professional and foreign language training (English, Chinese) in the technical field.
- Soft skills and international cultural knowledge, supporting candidates to adapt to the working environment.
Dependence on imported raw materials and components
Vietnam still has to import the majority of raw materials and high-tech components to serve the semiconductor manufacturing industry. This makes domestic businesses passive in controlling supply, especially when fluctuations occur in the global market.
The shortage of domestic raw material suppliers and advanced manufacturing technology increases costs and reduces the competitiveness of Vietnam's semiconductor industry. In the context of increasingly volatile global supply chains, dependence on imported raw materials makes Vietnam's semiconductor industry vulnerable to risks such as increased raw material prices, long shipping times, or trade embargoes.
XVI. Predicting semiconductor supply chain development trends in Vietnam
In the next 5-10 years, the semiconductor supply chain in Vietnam is expected to grow strongly, especially with the application of green and sustainable production technologies. Businesses in the industry will focus on improving production processes to minimize environmental impact and improve efficiency.
The potential of Vietnam's semiconductor industry is huge, especially when the trend of shifting global supply chains brings great opportunities for production expansion. The government and businesses need to continue to cooperate to build a sustainable development environment for this industry.
XVII. The role of universities and research institutes
Universities and research institutes play an important role in promoting the development of semiconductor technology in Vietnam. Collaborative research and projects between research institutes and businesses help create new technological solutions and improve products and production processes.
Connections between businesses and research institutes also help promote innovation in the semiconductor industry. Training programs for semiconductor engineers, combined with actual production, will help build a high-quality workforce and meet the increasing needs of the industry.
GLA HR: Supporting the sustainable development of Vietnam's semiconductor industry
Thanks to close cooperation with universities, research institutes and specialized training organizations, GLA HR has contributed to improving the quality of human resources in the semiconductor and electronic components industry. The company not only provides recruitment services, but also organizes in-depth skills training courses, helping semiconductor engineers work effectively and update the trends of modern technologies.
In particular, in the context of the semiconductor industry growing rapidly and needing highly skilled human resources, GLA HR has helped businesses reduce the burden of finding suitable personnel. The company also contributes to building flexible training and recruitment models, supporting the sustainable development of Vietnam's semiconductor industry in the future.
XVIII. Conclusion: Vision for Vietnam's semiconductor industry
The semiconductor industry in Vietnam is facing great development opportunities with favorable factors such as low production costs, opportunities from shifting global supply chains and strong support from the Government. However, for Vietnam's semiconductor industry to become stronger, it is necessary to resolve issues of human resources, technology and infrastructure.v
Businesses and the Government need to continue to cooperate to promote the development of the semiconductor industry, expand the supply chain and improve competitiveness in the international market.
