Asian AngleVietnam must ride semiconductor wave to cement its place in global value chain

To capitalise on gains in chip exports, Vietnam must adjust its policies to elevate itself in the supply chain and reduce reliance on foreign direct investment

Hanoi must also provide training for hi-tech sectors and bolster support for domestic businesses as it works towards producing ‘Make in Vietnam’ chips

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Workers at a Samsung factory in Vietnam, which is now the third-largest chip exporter to the United States. Photo: SCMP

Published: 10:30am, 27 May 2023

Vietnam is riding high on the semiconductor wave, with recent government data revealing it is now the third-largest chip exporter to the United States, behind only Malaysia and Taiwan.

Notably, chip revenues swelled by 75 per cent year-on-year, reaching US$562 million in February 2023. To put this in perspective, Vietnam’s exports of all electronic products to the US – including semiconductors – was merely US$110 million in February 2013.

The surge in chip exports is a testament to Hanoi’s strategic positioning amid US-China tensions. Firms caught in the semiconductor supply-chain maelstrom have turned to Vietnam, while American companies equally eager to diversify chip sources have found a reliable partner in Hanoi.

Samsung president Roh Tae-moon with Vietnamese Prime Minister Phạm Minh Chính during a meeting last year. South Korean giant Samsung last December inaugurated a US$220 million R&D centre in Hanoi. Photo: Handout

To translate these gains into long-term growth, Vietnam must adjust its policies, boost vocational training for hi-tech sectors and bolster support for domestic businesses. Currently, most of Vietnam’s chip exports come from foreign-invested companies. Although there is no breakdown for semiconductors, official data shows that 98 per cent of electronic-product exports come from foreign direct investment (FDI).