Vietnam’s Semiconductor Ambitions: A Localized Approach to Global Strategy
Local Leadership in Semiconductor Development
At the forefront of Vietnam’s semiconductor ambitions, local authorities are stepping up with proactive policy initiatives aimed at enhancing the country’s position within the global tech ecosystem. In Ho Chi Minh City, the implementation of Resolution No. 98/2023/QH15 has marked semiconductors as a strategic focal point. The resolution supports a series of advanced incentive schemes designed to attract investment, such as super-deductions on research and development (R&D) costs, customs priority for semiconductor materials, and substantial workforce training support. Additionally, preparations for industrial power infrastructure are being prioritized to cater to the high energy requirements associated with semiconductor operations.
Similarly, Da Nang, leveraging Resolution No. 136/2024/QH15, is carving out its niche as a hub for chip design and semiconductor services. The city is rolling out attractive incentives, including super-deductions of up to 150% on R&D, support for land leases, and streamlined procedural requirements for qualified investors. These measures aim to create an inviting landscape for both foreign and domestic semiconductor enterprises.
A Shift Toward Collaborative Federalism
The recent legislative changes exemplify a broader transformation in Vietnam’s investment strategy, which pivots from a top-down approach to a model of collaborative federalism. This framework blends central strategies with localized execution, allowing for nimble responsiveness to investor needs and the exploitation of regional strengths. By granting Provincial People’s Councils the authority to dictate criteria and fund support for semiconductor projects, Vietnam is fostering an environment conducive to innovation and investment.
This decentralized approach is essential for nurturing a competitive semiconductor ecosystem. By aligning investments with local capabilities, Vietnam ensures adaptability to shifting global market demands, making it a more attractive destination for investors.
Meeting Investor Expectations
As Vietnam’s semiconductor policies evolve, global investors are closely scrutinizing the new landscape of incentives. The shift toward cost-based incentives marks a departure from the past reliance on tax holidays, demonstrating a commitment to creating a competitive investment climate. However, for this initiative to succeed, clarity and execution are crucial.
Investors require detailed information about eligibility, application mechanisms, and predictable financial disbursement timelines. Moreover, beyond financial incentives, there’s a growing emphasis on ease of doing business. Factors like streamlined regulatory frameworks, efficiency in customs clearance, clear visa policies for foreign experts, and transparent land acquisition processes play a significant role in attracting multinational enterprises.
Local governments are increasingly pivotal in not only securing land and issuing licenses but also in designing attractive incentive packages that meet investor needs. Professionals in advisory roles are valuable in helping navigate Vietnam’s incentive landscape, ensuring alignment with global compliance prerequisites.
Building a Skilled Workforce
Vietnam recognizes that a robust semiconductor industry demands a skilled workforce, which is why the commitment to train 50,000 semiconductor engineers by 2030 is particularly noteworthy. However, achieving this goal requires a concerted effort to ensure that educational programs align with industry needs.
Leading universities must develop specialized semiconductor curricula and foster partnerships with industry stakeholders to provide practical training, internships, and sponsorships for laboratory facilities. Encouraging collaboration between academia and industry will ensure that graduates possess the technical competencies that meet real-world requirements.
Moreover, vocational education focusing on essential support roles—such as cleanroom technicians, quality assurance specialists, and maintenance staff—needs to be prioritized. National scholarship initiatives linked to industry apprenticeships and international study opportunities can also cultivate a long-term pool of qualified professionals.
Execution: The Key to Realizing Potential
Vietnam has laid a solid foundation for its semiconductor sector, complete with a national strategy, relevant legal frameworks, and supportive mechanisms. Local governments are starting to engage purposefully in this initiative, signaling that the stage is set for international investors to take note.
However, the real challenge lies in the execution of these strategies. For the private sector, now is the prime time to explore Vietnam’s burgeoning incentive offerings and develop meaningful partnerships with local authorities. Semiconductor firms should consider phased investment approaches, initially focusing on design or backend processes while assessing opportunities within front-end operations.
Policymakers, on the other hand, must prioritize the quality of implementation. This includes issuing thorough guidance on the application of incentives and streamlining bureaucratic processes to facilitate industrial infrastructure growth, as well as enhancing international relationships in areas such as education, research, and supply chain management.
The Stakes for Vietnam’s Semiconductor Journey
Vietnam is boldly positioning itself in the global semiconductor arena, transitioning from theoretical discussions to concrete actions supported by national strategies and local initiatives. The groundwork has been established, but success will hinge on the country’s ability to translate ambitious plans into effective ecosystems.
The next decade stands as a pivotal period for Vietnam. With collaborative action from both government entities and the industry, along with continuous refinement of its incentive delivery model, the country has the potential not just to emerge as an alternative but as a credible player in the dynamic field of global semiconductors.