Vietnam Semiconductor industry: Market overview and growth opportunities

Vietnam's semiconductor strategy, outlined in Decisions 1018/2024 and 1017/2024, shifts from broad high-tech promotion to a specific focus on chips. The vision, "C = SET + 1," emphasizes specialized chips, electronics, talent, and execution. This includes aggressive targets for human capital, such as cultivating 50,000 skilled personnel by 2030, and infrastructure, with plans for four national research hubs and upgraded university centers.

The policy framework provides clear incentives for investors. Companies focusing on chip design and Electronic Design Automation (EDA) can benefit from R&D support, talent development assistance, and university collaborations. For those in assembly, testing, and packaging, the government offers support for production activities and co-funding for equipment investments, aiming to improve returns.

While the market has seen substantial growth, reaching an estimated $21 billion in 2025 and projected to hit $31 billion by 2029, its structure remains uneven. Integrated circuits (ICs) dominated sales, accounting for 85% in 2024. However, Vietnam's industry is heavily concentrated in design, research, and back-end assembly, testing, and packaging. Front-end manufacturing, which requires advanced technology and significant investment, remains a future challenge, with limited presence in wafer fabrication facilities (fabs).

Foreign direct investment (FDI) played a crucial role, supporting approximately $11.6 billion of 2024 sales according to the Ministry of Planning and Investment. The 174 registered FDI projects primarily involve IC design, manufacturing, and assembly. Domestic companies currently have a limited role, mainly in back-end processes. The industry's activities are still fragmented, indicating that a fully continuous ecosystem has yet to form, particularly given the scarcity of full-scale wafer process projects.