RMIT University academics weigh in on Vietnam’s potential to grow into a semiconductor chip manufacturing powerhouse.

The media have widely reported of increased foreign interest in Vietnam’s semiconductor industry. This ranges from intentions to train engineers in chip design, to investments in manufacturing facilities for semiconductor components and materials.

Vietnamese telecommunications giant Viettel also proposed that it would become a semiconductor producer amidst the global chip shortage.

What lies behind these developments? Let’s hear from RMIT lecturers Dr Majo George and Dr Nguyen Manh Hung (School of Business & Management), and Mr Nguyen Le Huy (School of Science, Engineering & Technology).

Dr Majo George: “Right decision at the right time”

As a result of COVID-19, there has been a severe chip shortage globally. The pandemic has affected production by the “Big 4” semiconductor players in the Asia Pacific – Taiwan, China, Japan, and South Korea. The work-from-home trend increased the sales of laptops, home entertainment systems and game consoles, which raised the need for chips and tipped the demand-supply balance.

The decision to produce chips in Vietnam comes at a right time, as the world is having a chip shortage and Vietnam is undergoing a digital transformation that includes the transition to digital governance, digital economy and digital society.

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Venturing into chip manufacturing will be a chance for Vietnam to self-develop or acquire cutting-edge technological expertise. This might be a challenge, but the move will boost Vietnam’s future aspiration to become the prominent manufacturing hub in the region.

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Local industries would be able to source locally manufactured chips. And Vietnam’s chip output could help alleviate the global and regional shortage.

Quality assurance for Vietnam-made chips should be a priority, as are periodic research and product updates. Employing highly skilled and experienced researchers and specialists will be a challenge. Here, Vietnam must increase training and development of local skills. This can be accomplished by collaborating with prestigious universities and research institutes.

Dr Nguyen Manh Hung: “Building a steady supply chain”

Producing chips in Vietnam is in line with the “Make in Vietnam” orientation. Almost all aspects of modern society require semiconductors. If Vietnam can succeed in the semiconductor industry, it will be able to enter the supply chain of high-tech products such as communication equipment, computers, medical equipment and military equipment.

However, building a competitive semiconductor industry requires more than just capital investment. It will be a challenge to access the right technologies and set up a supply chain that can ensure steady supply and consumption.

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The semiconductor chip production process has three main stages: (1) design, (2) manufacturing, and (3) assembly, test, and packaging (ATP). Stages 1 and 2 are high-value and high-tech processes associated with heavy research and development (R&D), specialised software for design, and specific production equipment. Stage 3 has a high labour content and the lowest barriers.

Joining stage 3 seems to be easiest for Vietnam at the moment. However, the main goal of Vietnam’s entry into this competitive market should probably be to strengthen its chip design capabilities and move towards the production of high-end semiconductor components.

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(From left to right) Dr Majo George, Dr Nguyen Manh Hung and Mr Nguyen Le Huy

Mr Nguyen Le Huy: “Devising medium and long-term strategies”

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The global semiconductor chip industry is expected to grow 10% in 2022 to over US$600 billion for the first time ever and become a trillion-dollar industry by 2030.

Joining the global R&D, design, production, and distribution of semiconductor chips will bring enormous economic advantages to Vietnam. Given the country’s position and capabilities, medium- and long-term strategies are needed to develop the local semiconductor industry.

In the medium term, Vietnam needs to participate in R&D stages that are heavily reliant on the human factor. The government needs to continue to invest and offer preferential policies to attract large corporations such as Samsung, Intel, Synopsys, Cadence, etc. to establish or expand their semiconductor R&D centres in Vietnam. At the same time, it is necessary to have policies to support universities to train high-quality graduates in the field of semiconductor.

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In the long term, Vietnam needs to make efforts to reach cooperation agreements to support technology transfer from semiconductor leaders such as the US, Japan, and South Korea. From there, Vietnam can progress towards complete autonomy in all the important stages of semiconductor production.

At RMIT University Vietnam, semiconductor-based design and app development courses are being taught in several engineering programs. Students can learn and practice with semiconductor chip design software from leading corporations such as Mentor Graphics and Synopsys, as well as complete capstone projects or internships with leading industry partners such as Intel, Faraday, and Renesas.

In addition, we are currently accessing the feasibility of introducing a specialised engineering program focusing on semiconductor. Our desire is to be able to collaborate extensively with local universities and big global corporations to contribute to the development of the semiconductor field in Vietnam.

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@ RMIT

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