The strategy is part of Viet Nam's broader national plan to become a critical player in high-tech industries.

While the strategy involves gradually building local expertise and integrating Viet Nam into the assembly, packaging, and testing (APT) stages of the semiconductor value chain, it signals the country's long-term objective of becoming a leading global semiconductor hub.

This strategy also aligns with Viet Nam's broader goal of developing its electronics industry and enhancing its artificial intelligence (AI) capabilities.

Three advantages

According to the Diplomat, the first of these is the high degree of consistency and predictability afforded by Viet Nam's domestic political environment. Unlike some of its regional peers, Viet Nam is not prone to sudden shifts in policy direction or political upheavals. As national strategies tend to be inherited and promoted between generations of leaders, major policy disruptions are de-risked by design. For foreign companies looking to make long-term commitments in Viet Nam's semiconductor and technology industries, this stability is a crucial asset.

Second, Viet Nam's youthful population and substantial talent pipeline provide a strong economic advantage as major semiconductor hubs like the U.S. and South Korea are projecting massive labor shortages by 2030. Planned investment in the talent pool would propel Viet Nam as the next Asian net talent exporter to address the global labor market gap. With a large pool of skilled workers, Viet Nam has the potential to climb the value chain – moving from APT to chip design, prototyping, and even fundamental research – establishing the country as the next know-how hub.

Lastly, Viet Nam's strategic neutrality and warm diplomatic relations with key players in the global semiconductor industry add to its attractiveness as a leading semiconductor hub. This allows Ha Noi to carefully navigate geopolitical risks whilst avoiding taking sides with major superpowers, allowing them to do business with all parties. The comprehensive strategic partnerships that Viet Nam has signed have established foundations for deeper business cooperation, as seen in the rising number of business deals – e.g., Amkor's increased investment in its APT plan in Bac Ninh, delivery of chip design training from Cadence and Synopsys in Da Nang, and the expansion of design operations of Marvell – all of which signal further investments into R&D operations in the country. Leveraging such forms of economic diplomacy will go a long way to help Viet Nam position itself strategically in the global semiconductor race and mitigate the shortcomings of coming late to the game.

By leveraging its political stability, demographic advantages, and balanced diplomatic relations, Viet Nam has the potential to develop into a significant player in the global semiconductor value chain. However, success hinges on Viet Nam's ability to navigate geopolitical tensions, manage environmental challenges, and invest in its workforce and infrastructure.

The Diplomat concluded that if Viet Nam can successfully address these challenges and seize its competitive advantages, it will be well-positioned to capitalize on the ongoing shifts in global supply chains./.

Kim Anh

Source: VGP

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