Vietnam is actively advancing its semiconductor and artificial intelligence (AI) industries to capitalize on the global digital transformation. Recognizing the strategic importance of these fields, the country aims to position itself as a key player in the global supply chain. The decision to prioritize semiconductor and AI industries is driven by multiple factors:

• Global Demand: The semiconductor industry is the backbone of modern technology, powering everything from smartphones to advanced computing systems. AI, on the other hand, is revolutionizing industries worldwide, from healthcare to finance.
• Economic Growth: The Vietnamese government sees these industries as crucial to sustaining high economic growth rates and increasing national competitiveness.
• Talent Development: With a growing workforce of skilled engineers and researchers, Vietnam seeks to nurture its domestic talent pool in semiconductor and AI fields.
• Geopolitical Factors: As global companies look to diversify supply chains away from China, Vietnam presents itself as an attractive alternative for semiconductor manufacturing and AI research.

1. Government Policies Supporting Semiconductor & AI

To foster the growth of the semiconductor and AI industries, the Vietnamese government has introduced several supportive policies and initiatives. Investment incentives, such as corporate income tax reductions, aim to attract foreign businesses involved in AI and semiconductor research. Infrastructure development also plays a crucial role, with the establishment of the National Innovation Center (NIC) and high-tech zones in Ho Chi Minh City and Hanoi, creating a strong foundation for industry expansion.

Recognizing the need for skilled professionals, Vietnam has launched talent development programs to train engineers and researchers in semiconductor design, AI applications, and software development. The government also actively pursues international collaborations, engaging with global technology leaders like NVIDIA, Intel, TSMC, and IBM to facilitate knowledge transfer and joint R&D efforts. Regulatory support is another priority, with streamlined administrative procedures and an improved legal framework to facilitate business operations in these high-tech sectors.

At the recent Vietnam Semiconductor & AI Policy Forum, Prime Minister Pham Minh Chinh reaffirmed the country's ambition to become a key player in these industries. He highlighted the essential role of government support and international cooperation in driving technological advancements.

2. Opportunities & Challenges for Vietnam

Vietnam stands at a pivotal moment in the global semiconductor and AI landscape, with both promising opportunities and significant challenges. The country has the potential to secure a share of the trillion-dollar semiconductor market as demand continues to rise. With global tech giants seeking to diversify their manufacturing operations, Vietnam presents an attractive destination due to its cost-effective labor and stable business environment. Additionally, growing collaborations with major technology firms are strengthening the country’s research and development capabilities, positioning Vietnam as an emerging hub for innovation.

Another advantage is the ongoing shift in global supply chains. Many companies are reducing reliance on traditional semiconductor manufacturing hubs like China and Taiwan, and Vietnam is well-placed to benefit from this diversification.

However, several challenges must be addressed. Vietnam’s semiconductor sector remains focused on assembly and testing, with a lack of advanced chip fabrication facilities limiting domestic production. The country is also working to bridge a talent gap, as its workforce in semiconductor and AI industries is still developing compared to leading nations like the U.S. and South Korea. Reliance on imported technology and expertise presents another hurdle, making long-term self-sufficiency a challenge. In addition, Vietnam faces intense competition from well-established semiconductor hubs such as Taiwan, South Korea, and China, which continue to attract major investments.

3. Future Outlook for Semiconductor & AI in Vietnam

Vietnam’s trajectory in semiconductor and AI development points toward rapid growth and increasing global relevance. The expansion of high-tech zones remains a priority, with the government continuing to develop specialized areas for semiconductor manufacturing and AI research. Investment in these sectors is expected to rise, driven by both domestic and international players seeking to capitalize on Vietnam’s growing capabilities.

Stronger international partnerships will play a vital role in enhancing Vietnam’s position in the industry. Collaborations with leading technology firms, universities, and research institutions will help the country build expertise and strengthen its innovation ecosystem. In parallel, Vietnam is accelerating efforts to develop a skilled workforce, focusing on STEM education and vocational training programs tailored to the needs of the semiconductor and AI industries.

To further support industry growth, the government is refining its policies to attract more investment and foster a favorable business environment. With these strategic moves, Vietnam is on track to become a crucial hub for semiconductor and AI innovation in the region.

With strong government support, growing international interest, and a strategic focus on talent development, Vietnam is on track to become a major player in the global semiconductor and AI sectors. By addressing its challenges and leveraging its opportunities, the country can secure its position as a leading technology hub in the Asia-Pacific region.