Opportunity knocks
Mr. Nguyen Tu Quang, CEO of Vietnam’s Bkav Corporation, tells VET / VnEconomy’s Ngo Huyen and Thuy Dieu that focusing on the semiconductor sector, attracting foreign investment in electronics, and mastering software technology are key to Vietnam advancing in the high-tech field.
■ With government and business efforts to accelerate high-tech development, what steps should Vietnam take to create a breakthrough in this important field?
The recent surge in the global semiconductor race presents a significant opportunity for Vietnam to integrate into the global semiconductor technology chain. While the government’s focus on this surge is commendable, based on my extensive experience I believe the country’s strategy may need certain adjustments.
The chip crisis began with the Covid19 pandemic, causing production delays at the Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan (China) and disrupting industries worldwide. This crisis exposed the global overreliance on TSMC and the susceptibility of semiconductor supply chains to geopolitical factors. Consequently, TSMC has had to stabilize its operations by opening new factories around the globe.
This also revealed issues within the factory ecosystem, and is why TSMC is building and opening backup facilities. In Vietnam, however, there is a shortage of chip design engineers. I therefore think this approach may not fully address the core issues.
I am also concerned that with thousands of trained engineers, there may not be enough job opportunities. With advancements like GenAI potentially replacing chip design engineers and automation taking over chip assembly, Vietnam’s strategy might actually miss the mark. If we don’t adapt quickly, TSMC might choose to invest in markets that offer more compelling opportunities.
If we mismanage this, it could result in wasted investment, higher unemployment, and, most importantly, missing out on a rare opportunity.
■ What steps should Vietnam take to fully seize this once-in-a-lifetime chance?
Some argue that Vietnam will need to invest billions of dollars to lure TSMC to set up a factory here. However, financial incentives alone won’t guarantee TSMC’s long-term success. For example, despite a multi-billion-dollar investment in TSMC’s Arizona facility in the US, there are still issues due to various factors, including high labor costs. The US is even struggling with a concentrated semiconductor ecosystem that doesn’t fit the entire value chain.
Asian workers are not only cheaper but also hardworking and skilled. TSMC’s factories are therefore likely to remain in Asia. This presents a rare opportunity for Vietnam! We must do everything we can to attract TSMC to our country.
I am confident that Vietnam can do so because we offer more than just financial incentives. TSMC needs a stable, neutral Asian country to avoid dependency on any one side. Among regional countries, Vietnam has a uniquely stable socio-political environment.
Vietnam is at a critical juncture and must mobilize all its resources, from government to business, to prove that we can support TSMC’s long-term, sustainable growth.
■ Apart from TSMC, are there other companies capable of transforming Vietnam’s technology sector?
I have considered other potential candidates, but there are few alternatives. The semiconductor industry is dominated by a handful of companies, and none have the technological edge that TSMC offers. Vietnam should therefore focus on attracting TSMC, which would bring a complete high-tech ecosystem to the country.
TSMC needs a stable market, which is Vietnam’s strength. While it may seek gov
ernment investment, examples from the US, Japan, and Europe show that even billion-dollar investments don’t guarantee success. Vietnam is its best option right now.
To seize the opportunity, we need to demonstrate our enthusiasm and commitment to cooperation. If TSMC mentions a need for skilled workers, Vietnam should not hesitate to recruit our best engineers from abroad. I am certain they would be eager to return and contribute. Vietnamese engineers are highly intelligent and quick learners. I have heard that universities in Taiwan (China) that train TSMC’s workforce are now scouting for talent in Vietnam.
Vietnam doesn’t need to attract TSMC with money alone; we should win them over with our enthusiasm, sincerity, and long-term benefits. It will recognize what factors are most crucial at this moment.
■ Malaysia and Indonesia are also engaging with TSMC. Do you believe Vietnam holds enough advantages to attract the company?
I firmly believe that Vietnam has the greatest opportunity, mainly due to its socio-political stability. If we fail to seize the opportunity, it would be unfortunate if other countries succeed in attracting TSMC.
Countries are engaging with TSMC because its expertise can elevate an entire country’s economy and society. The world is highly dependent on TSMC. However, while software development may require millions of people, assembly operations need only tens of thousands because automation plays the primary role.
■ How has the recent effort to attract high-tech investment to Vietnam impacted the domestic industry and local companies? Have local companies taken advantage of the opportunities?
Vietnam has been relatively successful in attracting foreign investment in electronics manufacturing. Major players like Samsung and Foxconn have established operations here, and more are shifting their operations away from China. However, Vietnam has not fully capitalized on the opportunity to advance its R&D capabilities, partly due to financial constraints.
Some economies like China, Taiwan (China), and South Korea have advanced their technology through centrally-run funding via technology banks. Vietnam needs to learn from them and urgently develop its own funding mechanisms.
Given the similarities in our systems and China’s, adapting their approach could be beneficial, though it will require adjustments to fit our unique conditions. Vietnam has successfully attracted several major players in the software sector. In semiconductors, however, we must focus on mastering technology, as this is our strength. The formula for Vietnam’s success in the sector is simple: we need universities and research institutes, skilled human resources, innovative businesses, and technology funds and banks. We have most of these resources; we just need the investment funds.
Successfully bringing a TSMC factory to Vietnam would help establish a new semiconductor ecosystem, gradually leading us to master design technology, not just assembly.
To achieve mastery, Vietnam must intensely focus on developing R&D, including setting up dedicated funds or technology banks for the sector. Once R&D activities flourish, the market will gain inherent strength.
For example, in China, a favorable technology environment enables domestic tech companies to handle everything. In Vietnam, with a market of 100 million people, there is enough potential for companies to become stronger and reach global markets.
The electronics sector can require significant foreign investment, as building a hardware company takes decades. However, software development can be accomplished in a decade or so. Therefore, I believe Vietnam should focus on attracting major players to develop the electronics sector while independently advancing in software technology. It can effectively manage both.
■ What policies and strategies should Vietnam adopt to ensure the sustainable development of its high-tech sector?
To ensure sustainable growth in high technology, Vietnam must focus on building its own capabilities to retain and advance its tech industry. It is important to create strong internal resources for R&D, supported by technology funds and banks. Though Vietnam has set up research centers, these are still relatively small and fragmented and lack strategic direction from the government.
For example, Taiwan (China) has successfully adjusted its funding and support structures to address gaps in expertise. It has recognized the need for skilled leadership and sought out capable individuals to drive the sector forward.
Developing a high-tech industry is similar to constructing a building. The government provides high-level decisions, while on-the-ground experts need to manage and resolve immediate issues. It is not inherently difficult but requires clear goals and strong commitment.
■ Beyond establishing a strategic Statesupported fund, what additional steps should Vietnam take to achieve technological self-sufficiency?
Along with creating technology funds, developing high-tech zones is crucial. Vietnam already has a number of hightech parks, but these may need to be reassessed and improved.
For instance, the Hoa Lac HighTech Park in Hanoi was developed around the same time as the Zhongguancun technology hub in Beijing, around 1998. While Zhongguancun has become a hub for high-tech innovation in China, Hoa Lac has not yet reached its full potential.
This suggests that while Vietnam’s intentions may be sound, execution may need to be more precise.
Silicon Valley’s origins with HP, founded by a Stanford professor, show that early tech hubs often start small, with founders working out of garages rather than large facilities. The critical factor is people, and universities are key to producing the innovative thinkers and leaders needed for tech success.
Building a high-tech zone is like a chemical reaction; the sequence of elements determines the outcome. For example, linking a high-tech park with a technical university can foster a generation of innovative students who will drive technological progress.
Without these core components, a high-tech zone risks failing to generate significant change, making it a missed opportunity. ■
“I BELIEVE VIETNAM SHOULD FOCUS ON ATTRACTING MAJOR PLAYERS TO DEVELOP THE ELECTRONICS SECTOR WHILE INDEPENDENTLY ADVANCING IN SOFTWARE TECHNOLOGY.”
Mr. Nguyen Tu Quang
CEO of Vietnam’s Bkav Corporation