Nghiên cứu & Chuyển giao Công nghệ

By Prof. Dr. Sc. Nong Duc Ke, Director, AIAT Institute

Prof. Dr. Tu Trung Chan, Deputy Director, AIAT Institute

 

The semiconductor industry, valued at $700 billion in 2025 (Semiconductor Industry Association, SIA), forms the backbone of modern technology, powering everything from smartphones to AI data centers and IoT-enabled smart farms. For a nation to secure a significant role in this intricate global supply chain, it must deliver indispensable value to technology giants such as Apple, Samsung, and NVIDIA. This article delineates the criteria for participation, profiles key global players, outlines a strategic roadmap for emerging markets like Vietnam, and highlights Hanoi’s ambition to become Vietnam’s capital of science, technology, innovation, and creativity.

Part 1: Criteria for Participation in the Global Semiconductor Supply Chain

To be a substantive contributor to the semiconductor supply chain, a nation must occupy a critical, irreplaceable role in one or more segments. Below are the comprehensive criteria updated for 2025, reflecting the industry’s shift toward 2nm chips, AI-driven solutions, and compliance with ESG (Environmental, Social, Governance) standards. These criteria emphasize high-skill talent and niche applications such as IoT chips for agritech.

1.1. Core Technology and Manufacturing Capabilities

1.1.1. Foundry (Wafer Fabrication): Nations must host companies capable of producing advanced chips (2–5nm), which account for 40% of the supply chain’s value. Examples include TSMC (Taiwan, 60% of global foundry output, manufacturing Apple’s A18 chip for iPhone 17), Samsung (South Korea, 2nm foundry), and Intel (United States, investing $20 billion in new fabs).

1.1.2. Chip Design: Leading nations possess companies designing cutting-edge chips for AI, 5G, and IoT. The U.S. dominates with NVIDIA (H200 GPU for AI), Qualcomm (5G chips), and Apple (M4 chip), while the UK’s ARM provides architectures for 95% of smartphones. AI chip design constitutes 25% of market value (McKinsey, 2025).

1.1.3. Equipment Manufacturing: Producing chip fabrication equipment is a critical segment. ASML (Netherlands) holds a 100% monopoly on EUV lithography machines ($200 million each), essential for 2–5nm chips. U.S. firms like Applied Materials lead in testing equipment, contributing 15% to the supply chain’s value.

1.1.4. High-Skill Workforce: Nations require at least 10,000 engineers annually to support 2–5nm fabs. Vietnam aims to train 50,000 semiconductor engineers by 2030 (Vietnam Ministry of Science and Technology, 2025).

1.2. Significant share in value chain segments

1.2.1. Semiconductor materials: Japan dominates with a 60% share of photoresist (JSR, TOK) and 50% of silicon wafers (Shin-Etsu, Sumco), critical for 30% of global chip production ($100 billion market, 2025).

1.2.2. Assembly, Packaging, and Testing (APT): Malaysia (13% of global APT), Vietnam (5%, led by Intel and Amkor), and China (20%) are key players. APT accounts for 15% of the supply chain, with Intel’s Vietnam fab exporting $1 billion in Core i9 chips annually.

1.2.3. Niche Chips (IoT/Agritech): Specialized chips for IoT and agritech (e.g., soil moisture sensors) grow at 20% annually (Gartner, 2025), vital for smart agriculture.

1.3. Robust ecosystem

A nation requires a dense network of companies, universities, research institutes, and startups. Taiwan’s ecosystem, comprising TSMC, MediaTek, and 200 startups, generates $150 billion (2025). Vietnam is building its ecosystem through the Vietnam Innovation Fund (VIF, $40 million) and the Hoa Lac Hi-Tech Park.

1.4. Global connectivity and dependency

A nation’s products must be integral to the supply chains of companies like Apple or Tesla. The 2024 Taiwan earthquake disrupted 10% of global chip supply, delaying iPhone 16 production. A halt in Vietnam’s APT would impact 5% of Intel’s supply chain. ESG compliance is increasingly critical, with 70% of semiconductor investment funds prioritizing low-carbon operations (e.g., biogas-powered fabs).

1.5. ESG Compliance in the semiconductor industry

1.5.1. Environmental: Chip production consumes vast amounts of electricity and water. TSMC and Intel target net-zero emissions by 2050, using renewable energy (e.g., biogas) and recycling 70% of water.

1.5.2. Social: Safe, equitable workplaces, diversity, community engagement (e.g., education programs), and ethical sourcing are priorities.

1.5.3. Governance: Transparency, anti-corruption measures, and data security are essential.

1.5.4. Why ESG Matters: ESG enhances brand reputation, mitigates legal risks, and attracts green investments. TSMC’s commitment to 100% renewable energy by 2040 secured $10 billion in sustainable financing.

Table 1: Semiconductor supply chain criteria (2025)

Criteria	Description	Examples	Value Share
Core Technology	Foundry (2–5nm), Design (AI/GPU), Equipment (EUV)	TSMC, NVIDIA, ASML	70%
Segment Share	Materials (wafers, photoresist), APT	Japan (50% wafers), Vietnam (5% APT)	25%
Ecosystem	Network of firms, universities, startups	Taiwan (TSMC + 200 startups), Silicon Valley	20%
Global Connectivity	Dependency by Apple, Samsung, Tesla	Taiwan (iPhone chips), Vietnam (Intel APT)	30%

 

Part 2: Leading nations in the global semiconductor supply chain

In 2025, 18 nations and territories dominate the semiconductor supply chain, categorized into three tiers: the Big Four (80% of core technology), Material and Equipment Powerhouses (15%), and Production and Design Hubs (5%).

2.1. Big Four: Leaders in core technology

2.1.1. Taiwan (“Foundry Capital”): TSMC commands 60% of global foundry output ($100 billion revenue), producing 90% of AI chips and Apple’s A18. MediaTek supplies IoT chips for agritech (e.g., soil sensors).

2.1.2. South Korea (“Memory Kingdom”): Samsung leads in DRAM (50%) and NAND Flash (40%), with 2nm foundry capabilities. SK Hynix holds 30% of the memory market.

2.1.3. United States (“Innovation Hub”): Excels in design (NVIDIA, Apple) and equipment (Applied Materials). Intel’s $50 billion Arizona fabs target 1.8nm chips, recently achieving mass production of A18-equivalent chips (comparable to 2nm nodes).

2.1.4. Netherlands (“Gatekeeper”): ASML’s EUV lithography machines ($300 million each) hold a 100% market share, indispensable for advanced chip production.

2.2. Material and Equipment Powerhouses

2.2.1. Japan (“Material Master”): Supplies 50% of silicon wafers (Shin-Etsu) and 60% of photoresist (JSR), generating $70 billion.

2.2.2. Europe: Includes Germany (Infineon, 10% automotive chips), the UK (ARM, 95% smartphone architectures), and France (STMicroelectronics, agritech MCUs).

2.3. Production and Design Hubs

2.3.1. China: SMIC (7–14nm foundry, 5% market share) and Huawei HiSilicon (AI chips) lead in APT (20%), constrained by U.S. EUV bans.

2.3.2. Southeast Asia: Malaysia (13% APT), Singapore (GlobalFoundries, ~5%), Vietnam (5% APT, $2 billion exports in 2025), and Philippines/Thailand (3–5% APT).

2.3.3. India and Israel: Design hubs for Intel, Qualcomm (India), and Mobileye (Israel, AI chips for automotive applications).

Summary: The Big Four control 80% of core technology ($560 billion), Powerhouses 15% ($105 billion), and Production Hubs 5% ($35 billion). Vietnam’s 5% APT share indicates significant potential for deeper supply chain integration through APT.

Part 3: Vietnam’s pathway to effective participation in the global semiconductor supply chain

Joining the global semiconductor supply chain demands long-term vision, substantial capital ($1–10 billion per fab), and a target of 50,000 engineers by 2030. Vietnam’s strengths include Intel’s $1.5 billion APT fab, Amkor’s $500 million fab, and tax incentives (4-year exemptions, 50% reduction for 9 years). Proposed strategies include:

3.1. Bottom-Up Approach

3.1.1. Expand APT: Target a 10% global APT share with 1–2 new fabs ($1 billion each) from TSMC or ASE by 2026.

3.1.2. Attract FDI: Ensure stable power (99.9% uptime), clean water (10,000 m³/day), and tax incentives (0% for 4 years).

3.1.3. Develop Support Industries: Produce wafer trays and industrial gases with $100–200 million investment, creating 5,000 jobs.

3.2. High-Risk, High-Reward Investment

3.2.1. National Semiconductor Training Center in Hoa Lac: Allocate $2–8 million to train 5,000 engineers annually.

3.2.2. R&D Centers for Materials and Components: Establish initial centers in Hanoi, with plans for nationwide expansion.

3.2.3. National IC Research Institute: Invest $20 million to develop IoT/agritech chips.

3.2.4. National Venture Capital Fund for Startups: Support 100 chip-design startups annually ($0.4–2 million via VIF) and a few startups focused on semiconductor materials and components.

3.3. Niche Strategy

3.3.1. Target IoT/MCU Market: The $50 billion IoT/MCU market (20% annual growth) is ideal for agritech applications (e.g., irrigation sensors). Microcontroller Units (MCUs): An MCU is an integrated chip containing a central processing unit (CPU), memory (RAM, ROM, or Flash), and peripheral interfaces (e.g., I/O ports, ADC, PWM) on a single die. It is designed to perform control functions in electronic devices, from simple to complex.

A. Core Functionality: MCUs execute pre-programmed instructions, process sensor data, and control devices (e.g., motors, displays, LEDs).

B. Applications:

• Consumer Electronics: Control of washing machines, microwaves, air conditioners.
• Automotive: ABS braking systems, engine control, dashboards.
• Agritech: Soil moisture sensors, automated irrigation, livestock health monitoring (e.g., smart farms).
• IoT: Connectivity for smart devices like lights and temperature sensors.
• Healthcare: Blood glucose meters, health monitors.

C. Characteristics in Semiconductors:

• C1. High Integration: MCUs combine CPU, memory, and interfaces into a compact chip, reducing size and cost.
• C2. Energy Efficiency: Designed for low power consumption, ideal for battery-powered devices (e.g., IoT sensors).

D. Manufacturing Process: MCUs use less advanced nodes (28nm, 40nm, or higher) compared to CPU/GPUs (2–5nm), lowering production costs for affordable applications. Market Size: The global MCU market is $50 billion, growing 20% annually, driven by IoT and agritech (Gartner, 2025).

E. Real-World Examples:

• E1. STMicroelectronics (France): STM32 MCUs are widely used in IoT, automotive, and agritech (e.g., irrigation sensors).
• E2. NXP Semiconductors (Netherlands): MCUs for automotive and industrial systems.
• E3. Microchip Technology (USA): PIC and AVR MCUs for low-cost embedded applications, including smart farm controls.
• E4. Agritech in Vietnam: MCUs can control soil moisture sensors or livestock health monitors in smart farms, integrated with biogas systems for energy optimization.

F. Role in the Supply Chain:

• F1. Essential Low-Value Segment: MCUs require less advanced technology than AI/GPUs but are critical for embedded applications, especially IoT and agritech.
• F2. Opportunities for Vietnam: Vietnam’s APT strengths (e.g., Intel’s Ho Chi Minh City fab, Amkor’s Bac Ninh fab) enable MCU production or packaging. Hanoi, via Hoa Lac, can develop MCU designs for smart agriculture (e.g., irrigation or biogas sensors).
• F3. ESG Integration: MCUs in agritech optimize resources (water, energy) and reduce carbon emissions via smart systems.

G. Why MCUs Matter for Vietnam:

• G1. Versatility: MCUs are programmable for diverse applications, from consumer electronics to complex IoT systems.
• G2. Low Cost: At $1–2 per chip, MCUs suit price-sensitive markets like Vietnam.
• G3. Rapid Growth: MCU demand surges with IoT and smart agriculture, especially in developing nations.

3.3.2 Biogas-Powered Fabs: As an agricultural nation, Vietnam should leverage biogas from waste processing, livestock, or environmental treatment to power fabs, reducing carbon emissions by 50% and attracting $100 million from ADB Ventures.

3.4. Vietnam’s Roadmap (2025–2030)

3.4.1. 2025–2026: Expand APT, train 5,000 engineers, and attract FDI from Intel, Samsung, TSMC ($500 million minimum). Foster scientific collaborations with leading semiconductor universities and institutes in the U.S., Japan, South Korea, Taiwan, Germany, and the Netherlands to enhance the expertise of Vietnamese researchers and educators.

3.4.2 2027–2028: Develop support industries, fund IoT chip R&D, and achieve a 10% APT share. Strengthen technology transfer through partnerships with global semiconductor leaders.

3.4.3. 2029–2030: Design IoT/MCUs, particularly for advanced packaging, build a 28nm fab ($5 billion), and establish Vietnam as a regional R&D hub for semiconductors.

Part 4: Hanoi’s Vision to become Vietnam’s capital of science, technology, innovation, and creativity

Hanoi, Vietnam’s political and cultural hub, is strategically positioning itself as the nation’s capital of science, technology, innovation, and creativity, with a focus on semiconductors and AI-driven industries. Leveraging its proximity to the Hoa Lac Hi-Tech Park (transferred to Hanoi’s management by the Ministry of Science and Technology), a robust academic ecosystem, and supportive policies under the amended Capital Law (2024), Hanoi aims to drive Vietnam’s integration into the global semiconductor supply chain and foster a dynamic tech ecosystem. Below is a proposed roadmap for Hanoi to realize this ambition, aligned with global trends and Vietnam’s national objectives.

4.1. Strategic Pillars for the “Tech Capital” Ambition

4.1.1. Hoa Lac Hi-Tech Park – A Technology Nucleus: Located 30 km from Hanoi’s center, Hoa Lac is Vietnam’s premier hi-tech zone, hosting 109 projects worth $4.69 billion (2025). Hanoi aims to transform Hoa Lac into a “Silicon Valley of Vietnam,” focusing on semiconductor APT, AI R&D, and IoT/agritech chip design. By 2030, Hoa Lac targets $10 billion in investments, with 30% from FDI in semiconductors (e.g., potential fabs from Intel, Samsung, Amkor, TSMC, or GlobalFoundries). However, achieving this ambition is challenging, requiring answers to complex questions regarding institutions, policies, human resources, and capital. A misstep in strategy or execution could derail progress, as seen in India’s semiconductor journey.

4.1.2. World-Class Academic Ecosystem: In theory, Hanoi hosts leading universities such as Vietnam National University (VNU), Hanoi University of Science and Technology (HUST), and FPT University, producing 5,000 STEM graduates annually. VNU’s planned National Semiconductor Training Center ($10 million, 2026) aims to train 10,000 engineers by 2030, specializing in IC design and fabrication. Hanoi should strengthen scientific partnerships with TSMC Academy and NVIDIA Deep Learning Institute to enhance curricula. However, in practice, these universities currently lack sufficient faculty expertise in both quantity and quality to meet the minimum requirements for semiconductor training, from materials and equipment to design, fabrication, and APT. Hanoi must prioritize building a professional cadre of semiconductor educators and researchers, as elaborated below.

4.1.3. Innovation-Driven Policies: The amended Capital Law (2024) grants Hanoi unique incentives: 6-year corporate tax exemptions, 50% reduction for 12 years, a Hanoi Innovation Fund (HIF, $50 million), and a Hanoi Venture Capital Fund ($100 million) to support tech startups, particularly in semiconductor materials and components. These policies aim to attract $2 billion in FDI by 2028, prioritizing semiconductors.

4.1.4. Startup and R&D Ecosystem: Hanoi targets 500 tech startups by 2030, with 100 focused on chip design (IoT, MCUs) and AI. The Hanoi Innovation Hub, launching in 2026 ($5 million), will incubate startups with mentorship from global leaders like ARM and Intel. R&D centers, such as Viettel’s AI lab, will develop agritech chips (e.g., livestock sensors). This is a formidable task, requiring Hanoi to proactively engage top global scientists, particularly Vietnamese researchers abroad, and implement talent attraction policies for advanced technology professionals.

4.2. Hanoi’s role in Vietnam’s semiconductor strategy

4.2.1. Leadership in APT: Hanoi’s proximity to Hoa Lac positions it as an APT hub, with potential to attract new fabs from TSMC or ASE ($500 million each, 2026–2027). Hoa Lac currently hosts 14 FDI projects, including a $500 million digital technology project by SSI Digital Ventures (2025).

4.2.2. Training and R&D Hub: Hanoi will lead semiconductor workforce development with the National Semiconductor Training Center (10,000 engineers/year) and the National IC Research Institute ($20 million), focusing on semiconductor materials, MCU components, and IoT chips (via advanced packaging) for agritech (e.g., soil moisture or livestock health sensors).

4.2.3. Technology Startup Ecosystem: Hanoi will support 100 chip-design startups annually ($1 million/startup via HIF) and select startups in semiconductor materials and components ($3 million each, with preferential loans from the Hanoi Venture Capital Fund). These startups should collaborate with ARM and STMicroelectronics to develop low-cost MCU chips ($1–2/chip) for smart agriculture.

4.2.4. ESG Integration: Hanoi encourages fabs to use renewable energy (e.g., biogas from smart farms, waste, or wastewater treatment) to reduce carbon emissions by 50%, attracting $200 million from green funds like ADB Ventures and IFC by 2028.

4.3. Hanoi’s Roadmap (2025–2030)

4.3.1. 2025–2026: Attract 1–2 new APT fabs to Hoa Lac ($1 billion), launch the National Semiconductor Training Center (5,000 engineers/year), establish the Hanoi Innovation Hub (50 startups), and create an R&D center for semiconductor materials and components at Hoa Lac.

4.3.2. 2027–2028: Develop support industries (wafer trays, industrial gases), fund 100 IoT chip-design startups ($100 million via HIF), and achieve 20% of Vietnam’s APT output.

4.3.3. 2029–2030: Establish the National IC Research Institute, develop IoT/MCU chips for agritech, and attract a 28nm fab ($2 billion), positioning Hanoi as a regional semiconductor and AI hub.

4.4. Lessons from global tech cities

4.4.1. Hsinchu, Taiwan (Anchored by Tsinghua University): Hsinchu Science Park, near National Tsing Hua University, hosts TSMC and 200 startups, generating $150 billion (2025). Lesson: Integrate hi-tech zones with academic ecosystems.

4.4.2. Bangalore, India (Design Hub): A chip-design center for Intel and Qualcomm, supported by 1,000 startups via the DLI program. Lesson: Leverage tax incentives and international partnerships.

4.4.3. Phoenix, Arizona, USA (Anchored by ASU): Evolving from a legacy base (Motorola, 1950s) to a modern hub, unlike Hsinchu’s greenfield approach. Lesson: Build on existing strengths while scaling innovation.

4.5. Strategic Recommendations for Hanoi

4.5.1. Strengthen Hoa Lac ecosystem: Invest $500 million in Hoa Lac infrastructure (power, water, 5G) to attract major semiconductor players like NVIDIA, Intel, TSMC, Samsung, Amkor, or GlobalFoundries (APT fab, 2026).

4.5.2. Enhance international scientific collaboration: Participate in SEMICON West in San Francisco (2026) to track global technology trends. Host the Vietnam Semiconductor Summit 2025 in Hanoi to connect with TSMC, Intel, and NVIDIA. Invite experts from the U.S., Japan, Taiwan, and South Korea for short-term semiconductor training, particularly in APT ($100,000/course).

4.5.3. Apply Semiconductors to Agritech: Develop IoT/MCU chips for smart pig farms (e.g., biogas sensors) through partnerships with Hoa Lac startups, fostering a state-university-industry collaboration model.

4.5.4. Integrate ESG: Use biogas to power APT fabs, attracting $300 million from green funds and enhancing Hanoi’s reputation as a sustainable technology hub.

Conclusion

The global semiconductor supply chain is a highly competitive arena where technological prowess, strategic ecosystems, and ESG compliance drive success. Vietnam, with its strong APT position and policy momentum, is well-placed to ascend the value chain. Hanoi, leveraging Hoa Lac, its academic ecosystem, and innovation policies, is a key driver in positioning Vietnam as a regional technology hub. By focusing on R&D in semiconductor materials and components, prioritizing APT, enhancing workforce training, developing IoT/agritech chips, and integrating ESG, Hanoi can lead Vietnam’s technological ambitions, contributing $5 billion to GDP by 2030. This marathon demands patience, investment, and global collaboration, but the transformative rewards will solidify Hanoi’s role as Vietnam’s capital of science, technology, innovation, and creativity.