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Chip Worker Shortage in Vietnam: A Critical Hurdle in Semiconductor Expansion

Kelley Britton-Kant
October 9, 2023
3:52 pm
0 comments

Vietnam

Vietnam's emergence as a significant player in the global chip industry is on the horizon, driven by collaborative efforts with the United States. However, a critical obstacle stands in the way of these ambitions—a severe shortage of skilled chip workers. In this blog, we explore the pressing issue of the chip worker shortage in Vietnam and its potential implications on the progress of the nation's chip industry and U.S. semiconductor strategy.

The Promise and the Challenge:

Vietnam is becoming an important focal point in the global chip supply chain, with the U.S. aiming to enhance semiconductor production in friendly nations through a strategy known as "friendshoring." Recent discussions between President Joe Biden and Vietnamese leaders underscore the collaborative efforts to bolster Vietnam's chip industry and forge new partnerships. However, this positive momentum is marred by a significant shortage of trained chip workers in Vietnam.

Chronic Shortage:

The chip industry is experiencing rapid growth, driven by advancements like artificial intelligence (AI) and electric vehicles, resulting in an increased demand for high-performance silicon chips. In the U.S., reports predict a shortfall of 67,000 technicians, computer scientists, and engineers by the end of the decade. In Vietnam, the shortage is even more alarming relative to its population size, with only 5,000 to 6,000 trained hardware engineers for a nation of 100 million people.

The Urgent Need for Skilled Workers:

Vietnam urgently needs to address this shortfall to meet its ambitions in the chip industry. Experts estimate that in five years, the demand for trained hardware engineers in Vietnam will reach 20,000, rising to 50,000 within a decade. Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council, emphasizes that the current number of available hardware engineers falls significantly short of what is required to support multi-billion-dollar investments.

Potential Investments and Implications:

Vietnam is well-positioned to attract substantial investments in its chip industry, with the U.S. dedicating around $500 million to enhance global semiconductor supply chains through the CHIPS Act. Private investment from companies like Intel, Amkor, Synopsys, and Marvell is already flowing into Vietnam, indicating its potential as a semiconductor hub. However, the shortage of trained workers in Vietnam raises concerns that investors may consider other regional competitors like Malaysia and India.

Easing Diplomatic Tensions:

Recent diplomatic developments, including the elevation of the U.S.'s diplomatic status in Vietnam, have paved the way for increased partnerships and investments in Vietnam's chip industry. These positive steps are key to strengthening economic ties and fostering a conducive environment for semiconductor expansion.

The shortage of skilled chip workers poses a significant challenge to Vietnam's aspirations of becoming a notable player in the global chip industry. Addressing this shortage is crucial for both Vietnam and the United States to achieve their semiconductor ambitions. A coordinated effort and strategic investments are essential to develop a larger semiconductor talent pool in Vietnam, propelling the nation toward its goals in the chip industry.

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