Vietnam is a decoupling recipient of the US-led device war against China and is a significant newcomer to the global semiconductor industry.
Vietnam’s well-educated and highly motivated professionals work for relatively lower wages, attracting several silicon presentation and layout companies from the US, Germany, Japan, South Korea and Taiwan.
With a technology-oriented business development plan, Vietnam is following in the footsteps of Malaysia, now the country’s sixth-largest silicon producer and with 13 % of the world assembly, tests and packaging industry, according to ISIS Malaysia, a think tank.
This will undoubtedly appeal to the Biden administration, which has been advocating Vietnam as a viable alternative to China under the US-Vietnam Comprehensive Strategic Partnership, despite the fact that it is likely going to happen anyway.
According to market research firms, Vietnamese engineers make about US$ 8, 000 annually, which is roughly half the salary that engineers in Malaysia make. Those figures are$ 34, 000 in South Korea,$ 46, 000 in Taiwan,$ 50, 000 in Japan and$ 68, 000 in Singapore.
Semiconductor industry sources say annual salaries for design engineers with less than three years of experience range from$ 10, 000-$ 15, 000 in Vietnam versus$ 65, 000-$ 70, 000 in the US.
Even with faulty data and fluctuating exchange rates, salaries in Vietnam and Malaysia are so low that there is little chance of closing the pay gap in the near future.
This explains why Intel’s largest integrated circuit ( IC ) assembly, packaging, and test facility are both in Vietnam and in Malaysia, which has its largest advanced 3D packaging facility.
Germany’s largest semiconductor maker, Infineon, has established a product development team at its new office in Hanoi, which was opened in June of last year.
With a burgeoning and youthful population of nearly 100 million, Vietnam has quickly become a coveted destination for multinational corporations seeking to tap into a pool of exceptional technical talent, according to the CEO of Infineon Technologies Asia-Pacific, C S Chua.
The new development center in Hanoi, according to senior Infineon executive Hartmut Hiller, will make it easier for Infineon Technologies to meet the rising demand for functional testing and customized circuit designs, particularly for our leading System-on-Chip ( SoC ) solutions.
At its new factory in Malaysia, which has a skilled workforce and supportive infrastructure, Infineon began producing silicon carbide power semiconductors earlier this month. As the Vietnamese semiconductor industry expands, it is important to keep safe supply of electricity and water.
Renesas Electronics, Japan’s largest integrated semiconductor device manufacturer, has been in Vietnam since 2004, when it established a design team in Ho Chi Minh City. Renesas Design Vietnam is now the largest design studio for the business outside of Japan. Renesas has also established universities in Vietnam as a provider of semiconductor design programs.
South Korean IC design companies BOS Semiconductors, which works with Hyundai, and CoAsia, which works with Samsung, have R&, D centers in Vietnam.
Samsung Electro-Mechanics, Hana Micron Vina and Hanmi Semiconductor manufacture package substrates, printed circuit boards and semiconductor packaging equipment, respectively, in Vietnam.
While Alchip Technologies intends to establish one, Taiwanese semiconductor design firms GUC and Faraday Technology both have design centers in Vietnam. GUC and Alchip are affiliated with Taiwan’s world-leading TSMC.
FCC Partners, a Taiwanese investment bank, is collaborating with FPT Software in Vietnam to create a Vietnam Semiconductor Development Fund.
Vietnam also has its own semiconductor design firms, including VN Chip and FPT Semiconductor. With the support of universities, start-up incubators, large corporations and financial institutions, high-tech industrial parks, tax incentives and subsidies, more can be expected.
By 2030, the Vietnamese government intends to train 50 000 semiconductor engineers. According to Associate Professor Truong Viet Anh of the Hanoi University of Science, that is about ten times more than the nation currently has, according to VnEconomy.
But the largest foreign presence in the Vietnamese semiconductor industry, far and away, is American. In addition to Intel, US companies with operations in Vietnam include Microchip, Marvell, Qualcomm, Synopsis, Cadence, Savarti, Uniquify and Amkor.
Marvell, which specializes in data infrastructure semiconductor solutions, expects Vietnam to become its third-largest design center after the US and India.
Microchip, which makes microcontrollers, mixed-signal, analog and other devices, develops chips for the auto, industrial, aerospace and defense, communications, computing and consumer markets in Vietnam.
In 2003, Qualcomm established a presence in Vietnam, and it has since collaborated with network providers and the government to switch from 2G to 5G. The company runs the annual Qualcomm Vietnam Innovation Challenge , for start-ups with the support of Vietnam’s Ministry of Science and Technology.
Synopsis, the world’s top electronic design automation company, has more than 500 employees at several locations in Vietnam. The Da Nang People’s Committee, the Vietnam National Innovation Center ( NIC ), and the Authority of Information and Communication Technologies Industry, all signed MOUs in 2023 to support the establishment of a semiconductor research institute.
The NIC also made an announcement last year that it would collaborate with Synopsis rival Cadence to promote IC design innovation in Vietnam. Under the agreement, Cadence design tools are provided to Vietnamese universities, training centers and start-ups. Additionally, the NIC and Arizona State University have come to an agreement to create training and research programs related to semiconductors.
US semiconductor design companies Savarti and Uniquify have established R&, D centers in Vietnam, with Savarti specializing in analog and mixed-signal devices and Uniquify in system-on-chip ( SoC ) design.
Amkor, the world’s second-largest provider of outsourced semiconductor assembly and test ( OSAT ) services, opened its first factory in Vietnam in October 2023. Located in the Yen Phong Industrial Park in the province of Bac Ninh, near Hanoi, it is a” state of the art” factory, according to Amkor CEO Giel Rutten. ” The kind of secure and reliable supply chain our customers need—in communications, automotive,  , high-performance computing, and other key industries”, he added.
On July 26 of this year, the US Department of Commerce signed a non-binding preliminary memorandum of terms with Amkor to help with the construction of the company’s first OSAT factory in the US with up to$ 400 million in direct funding, loans, and tax credits under the CHIPS Act. The US Department of Commerce had a secure supply chain in mind. A$ 2 billion investment in advanced packaging capability, it is expected to create about 2, 000 jobs in Arizona.
” Accordingly”, writes the US Commerce Department,” companies such as TSMC, Apple, and GlobalFoundries–which power the world’s most advanced technologies–will be able to package and test their essential chips domestically, enabling the full end-to-end cycle of the chip manufacturing process to occur in the United States”.
However, the$ 500 million International Technology Security and Innovation ( ITSI) Fund provides financial support for the semiconductor industry in Vietnam and other countries overseas.
As such, Amkor’s new factory in Bac Ninh may eventually employ about 10, 000 workers when it reaches full capacity, according to a Vietnam report.
Gina Raimondo, the US Secretary of Commerce, was without a doubt correct when she claimed that” this proposed funding would enhance our supply chain security.” However, it appears that it will result in a lot more employment for Vietnam than for the US.
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