Academics from RMIT University are weighing in on Vietnam’s potential to become a powerhouse for semiconductor chip manufacturing.
The media have reported extensively of the increased foreign interest in the semiconductor industry in Vietnam. 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 suggested that it would become a semiconductor producer amid the global chip shortage.
What is behind these developments? Let’s listen to RMIT teachers Dr. Major 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 is a serious chip shortage worldwide. The pandemic has impacted production by the “Big 4” semiconductor players in the Asia-Pacific – Taiwan, China, Japan and South Korea. The work-from-home trend increased sales of laptops, home entertainment systems and game consoles, increasing the need for chips and shifting the supply-demand balance.
The decision to produce chips in Vietnam comes at the right time as the world is in a chip shortage and Vietnam is undergoing a digital transformation that includes the transition to digital governance, digital economy and digital society.
By venturing into chip manufacturing, Vietnam will have an opportunity to develop itself or acquire advanced technological expertise. This may be challenging, but the move will boost Vietnam’s future ambition to become the region’s prominent manufacturing hub.
Local industries could buy locally produced chips. And Vietnam’s chip production could help alleviate the global and regional deficit.
Quality assurance for chips made in Vietnam should be a priority, as should periodic research and product updates. Hiring highly educated and experienced researchers and specialists will be a challenge. Here, Vietnam must increase the training and development of local skills. This can be done by collaborating with prestigious universities and research institutes.
dr. Nguyen Manh Hung: “Building a stable supply chain”
The production of 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. Accessing the right technologies and building a supply chain that can ensure steady supply and consumption will be a challenge.
The semiconductor chip manufacturing process consists of three main stages: (1) design, (2) fabrication, and (3) assembly, test, and packaging (ATP). Phase 1 and 2 are high-performance and high-tech processes that involve heavy research and development (R&D), specialized design software and specific production equipment. Phase 3 has a high labor content and the lowest thresholds.
Participating in stage 3 seems 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 into the production of high-performance semiconductor components.
mr. Nguyen Le Huy: “Devise a strategy for the medium and long term”
The global semiconductor chip industry is expected to grow by 10% by 2022 to over $600 billion become a trillion dollar industry for the first time ever and by 2030.
Joining the global R&D, design, manufacturing and distribution of semiconductor chips will bring huge economic benefits 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 should participate in R&D phases that are highly dependent on the human factor. The government should continue to invest and offer preferential policies to attract major companies such as Samsung, Intel, Synopsys, Cadence, etc. to establish or expand their semiconductor R&D centers in Vietnam. At the same time, policies are needed to support universities in training high-quality semiconductor graduates.
In the long term, Vietnam should make efforts to secure cooperation agreements to support technology transfer from leaders in semiconductors such as the US, Japan and South Korea. From there, Vietnam can move towards full autonomy in all major stages of semiconductor manufacturing.
At RMIT University Vietnam, courses in semiconductor design and app development are taught in various engineering programs. Students can learn and practice with semiconductor chip design software from leading companies 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 investigating the feasibility of introducing a specialized engineering program focused on semiconductors. Our desire is to cooperate extensively with local universities and major international companies to contribute to the development of the semiconductor field in Vietnam.