Vietnam’s semiconductor industry expects benefits from partnership with US chipmaker NVIDIA
Vietnam’s semiconductor industry expects benefits from partnership with US chipmaker NVIDIA
A recent partnership with U.S. chip giant NVIDIA will open a wider door for Vietnam to develop its semiconductor industry as the group pledged to shift part of its manufacturing to Vietnam in the future, according to several local experts.
An employee is at work at a factory in northern Vietnam. Photo: Gia Doan |
The Vietnamese government and NVIDIA on December 5 inked an agreement to open an artificial intelligence (AI) research and development center in Vietnam.
As of the start of December, Vietnam had attracted 174 foreign-invested projects active in the semiconductor industry with a total registered capital of US$11.6 billion.
Many experts believe that the presence of NVIDIA, the world’s leading chip designer, in Vietnam would bring about multiple opportunities for the growth of the semiconductor sector.
Vietnam will become an attractive destination for hi-tech and AI projects with a total registered capital of billions of dollars.
Vo Xuan Hoai, deputy director of the Vietnam National Innovation Center, underlined that the cooperation with NVIDIA would go beyond chip production.
After the AI research and development center is set up, some 130 employees will work there in the initial stage, and the figure will surge over the next few years.
The center, set to become a cornerstone of the AI ecosystem in Vietnam, will act as a magnet to attract a host of enterprises which specialize in providing AI devices.
Notably, when deciding to invest in Vietnam, NVIDIA opted to acquire a startup, VinBrain, as the foundation for the establishment of an AI research and development center.
This demonstrated NVIDIA’s strong assessments of investment potential to create significant values for both the group and Vietnam.
Apart from the partnership in chip production, the two sides will promote some supporting fields, including applying AI to chip development and manufacturing to serve AI services, Hoai stated.
Nguyen Van Toan, an expert in the foreign direct investment field, insisted that joining hands with NVIDIA would offer new opportunities to drive up the semiconductor sector in Vietnam.
That NVIDIA will establish the AI research and development center in Vietnam and gradually shift its chip manufacturing operations to the country is a positive signal for the domestic semiconductor industry, he stressed.
Vietnam will be able to welcome the group’s shift of a chip manufacturing factory worth some $4 billion, or a facility of chip testing and packaging in the coming time.
Meanwhile, domestic tech enterprises will focus on semiconductor designing, testing, and packaging stages that require a huge workforce.
The government has tasked some relevant ministries and departments in collaboration with universities with training 50,000 semiconductor engineers to make the country ready to boost the chip design process.
The value of chip design accounts for up to 60 percent of chip prices, he said.
Professor and Dr. Nguyen Mai, chairman of the Vietnam's Association of Foreign Invested Enterprises, affirmed that Vietnam has huge potential for semiconductor and AI expansion.
In addition to NVIDIA, a wave of foreign investors is eyeing investments in semiconductor, AI and blockchain fields in Vietnam.
Since 2023, a host of international firms have entered the nation to seek out cooperation and investment chances.
Moreover, 2023 marked a political and diplomatic milestone for Vietnam in the global and regional markets, and witnessed Vietnam and the U.S. officially upgrade their ties to comprehensive strategic partnership during the Vietnam visit of U.S. President Joe Biden.
Vietnam and the U.S. are fostering their strategic cooperation in the semiconductor and AI spheres, the professor noted.
The U.S. will give essential support to Vietnam to develop the two industries while helping the latter utilize the abundant resource of rare earths.
In 2023, the U.S. announced its aid package worth $500 million for the nations that were partnering with the former to develop the semiconductor sector, with 15 percent of the total set aside for Vietnam.
Around 13 semiconductor investment projects, with a total capital of $3-4 billion, are currently under negotiation for operation in Vietnam, according to the Ministry of Planning and Investment.
These projects are expected to receive licenses by early 2025.
Nguyen Chi Dung, Minister of Planning and Investment, stated that Vietnam is increasingly emerging as a destination for semiconductor and AI technologies.
Two working teams of the ministry had previously worked with NVIDIA to call for investment and concretize a cooperation plan, resulting in breakthrough outcomes that contributed to turning Vietnam into a potential destination for hi-tech, semiconductor, and AI investments.
The government and the group have signed an agreement to open an AI research and development center and an AI data center in Vietnam, he said.
The deal acted as a boost for Vietnam to make greater strides in the technology industry and draw more global hi-tech companies, especially those active in the semiconductor and AI fields.
After the signing, NVIDIA quickly started relevant steps such as recruiting employees, strengthening the leadership apparatus, and attracting local and international talent to the AI research and development center.
A source from the Ministry of Planning and Investment revealed on Monday that NVIDIA would not directly manufacture, test, and package chips, but it will only design advanced chips.
The chip designing stage brings about the highest value among four stages of the chip production and supply chain.
Enterprises belonging to the group’s semiconductor ecosystem are in charge of the three remaining stages, including chip manufacturing, testing, and packaging.
The source added that if some of these enterprises shift their operations to Vietnam, tens of billions of dollars will be poured into the nation in the coming time.
