The Challenges of Developing Vietnam’s Semiconductor Industry

The Challenges of Developing Vietnam’s Semiconductor Industry

Nguyen Phuong Linh is a determined young student in Vietnam’s electronics field, setting her sights on contributing to the country’s goal of becoming a hub for semiconductor production. She aspires to become a professor to train future generations of engineers who can attract foreign investors looking to diversify chip manufacturing away from China and Taiwan. Vietnam’s transition from being a low-cost manufacturing destination to a key player in the global supply chain has highlighted the importance of the semiconductor industry in its development plans.

Vietnam’s semiconductor market is projected to grow significantly in the coming years, with estimates suggesting a 6.5% annual increase, reaching $7 billion by 2028. The interest in chips has attracted attention not only from the government but also from major players like the United States and South Korea. US President Joe Biden’s announcement of deals to support Vietnam’s chip industry and Nvidia’s plan to establish a base in the country signal a growing recognition of Vietnam’s potential in the semiconductor sector.

One of the main challenges facing Vietnam’s semiconductor industry is the shortage of highly skilled engineers. The country’s current pool of 5,000 semiconductor engineers falls short of the government’s target of reaching 20,000 engineers in the next five years and 50,000 engineers over the next decade. A plea from Deputy Prime Minister Tran Luu Quang to Samsung for assistance underscores the urgency of developing a robust talent pipeline in Vietnam.

Experts emphasize the importance of quality education and training in preparing students for careers in semiconductor design and manufacturing. While Vietnam has launched additional programs focusing on semiconductor and chip design, there is a need for more investment in infrastructure and equipment to provide students with practical skills demanded by industry leaders. The practical training gap poses a challenge in retaining top graduates, as there is a real risk of brain drain to countries with more established semiconductor industries.

The low salaries in Vietnam compared to other chip-making nations create an incentive for skilled engineers to seek opportunities abroad, leading to a potential brain drain in the semiconductor sector. Analysts point out that without competitive compensation and opportunities for career growth, talented individuals may choose to leave Vietnam for countries like Taiwan. While some students like Linh express a desire to study abroad but return home, others like final year student Son are tempted to pursue opportunities overseas for further learning and career advancement.

Vietnam’s semiconductor industry holds immense growth potential, but it faces significant challenges in developing a skilled workforce and retaining top talent. The government’s ambitious targets for increasing the number of engineers must be supported by robust educational programs and industry partnerships to ensure sustainable growth in the semiconductor sector. Addressing the brain drain risk will require competitive incentives and opportunities for career advancement to encourage skilled professionals to contribute to Vietnam’s semiconductor industry’s development.


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