The U.S. is racing to source chips from Vietnam — but engineers are scant

A deficit of 15,000 engineers is predicted in the next five years. Just 89 students are enrolled in the country’s only comprehensive chip engineering degree.

SOURCE: Rest of World

The story goes that in 2004, a Vietnamese-American entrepreneur opened a microchip design company in Hanoi — to be close to his Vietnamese wife, among other reasons. He hired electrical engineering and telecommunications student Nguyen Thanh Yen, despite Yen lacking any knowledge about chips. Yen spent his first three months on the job devouring textbooks on chip design.

Fast forward to the present day, and Yen is the lead engineer at Korean chip design company CoAsia Semi’s Hanoi branch. Despite building a thriving career, he still has the same struggle as his first boss: finding enough chip engineers to hire. Over the past three years, he’s only been able to recruit 70 chip design engineers, a fraction of his target goal of 300, he told Rest of World.

He even created a course for engineering students to coach chip designers into existence. “It was impossible to find 300 experienced engineers, so I convinced the company to let me create a training program,” Yen said. “I’m quite proud of the team I’ve built.”

On September 10, the U.S. and Vietnam inked a “comprehensive strategic partnership,” elevating the former foes’ bilateral relations to the highest diplomatic level. At the center of the engagement is a new semiconductor partnership aimed at supporting resilient supply chains for the U.S. It includes initial seed funding from the U.S. government, amounting to $2 million, to develop teaching labs and training courses for semiconductor assembly, testing, and packaging in Vietnam. The money is coming from the International Technology Security and Innovation (ITSI) Fund under the CHIPS Act — which aims, among other things, to “expand and diversify U.S. downstream capacity in the Indo-Pacific and the Americas.”

Yet Vietnam currently only has about 5,000 hardware engineers trained for the chips sector, estimated Yen, who also runs a popular Facebook-based community of microchip engineers. The country would have to increase this number nearly tenfold over the next decade to meet expected demand from incoming semiconductor companies, according to Reuters. And while the U.S. needs experienced Vietnamese chip engineers quickly, the talent pipeline is sparse: There are very few chipmaking courses available, and student awareness of the profession is low, experts told Rest of World. The quickest route to gaining the necessary labor force would have to be through retraining electrical and other engineers — much like the leap that Yen made.

Vietnam’s semiconductor activity dates back decades, but has been stymied due to lack of funds and technical expertise, experts told Rest of World. It is dominated by about 40 foreign players, most notably U.S. tech giant Intel, which has its largest chip assembly and testing facility in Ho Chi Minh City. This has already placed Vietnam as the third-largest exporter of chips to the U.S., behind only Malaysia and Taiwan, according to the U.S. Census Bureau.

Most semiconductor makers moving to Vietnam are concentrated in chip design — the least capital-intensive part of the supply chain — to take advantage of the country’s lower wages. Local players are few and far between, with military-run telecoms company Viettel and tech giant FPT leading the pack.

The ecosystem has been growing. FPT is already exporting its engineers to Japan, and has secured orders for millions of its first in-house-designed chips for medical equipment. Several U.S. semiconductor companies have also recently expanded to Vietnam. Amkor Technology is slated to open a $1.6 billion chip assembly and testing factory in the industrial Bac Ninh province next month. Synopsys is opening a semiconductor design and incubation center in collaboration with Saigon Hi-Tech Park. Marvell has plans for a semiconductor center in Ho Chi Minh City, where Intel has already been present for over 15 years.

However, the presence of big names hasn’t been enough to attract a large number of prospective Vietnamese students to fill employer demand.

“They are not really aware of these job opportunities in semiconductor engineering,” Udo Klein, senior lecturer in electrical engineering at the Vietnamese-German University near Ho Chi Minh City, told Rest of World. Meanwhile, he added, “countries such as India are making strong efforts to develop their semiconductor economy, intensifying the global competition for talent and market share.”

The lithography room at Hanoi University of Science and Technology (HUST), Vietnam’s top engineering school, is typically home to a researcher or two, clad head to toe in a cleanroom suit while working under the warm yellow light. The university’s material sciences institute was established in 1992 as a partnership between the Vietnamese and Dutch governments, and the cleanroom is funded with Dutch and Japanese development aid money.

Just this year, HUST launched its undergraduate degree on semiconductor fabrication and design, titled Microelectronic Engineering and Nanotechnology — the first and only one of its kind in Vietnam. Industry names like Amkor Technology, Viettel Telecom, and Seoul Semiconductor have expressed interest in partnerships. The last is even gifting the institute vital equipment for students.

“The teaching staff have wanted [to develop a semiconductor manufacturing major] for a long time now,” Nguyen Van Quy, associate professor at HUST, told Rest of World. The university’s director finally greenlit it last year, following “greater investment and expansion to Vietnam by large semiconductor companies,” he said.

The first batch of 89 students started their term last week. Among them is Nguyen Dang Ha, from Bac Ninh province. He recalled watching a giant Amkor chip factory being built near his house, which influenced him to apply. It will take Ha five and a half years to graduate with undergraduate and master’s degrees, though his ambitions don’t include returning home to work for the U.S. chip giant. “I want to go overseas to pursue further studies,” he told Rest of World.

But to take advantage of the U.S. partnership — and for the U.S. to see the quick results it needs — Vietnam needs engineers now. “There is a risk that the current window of opportunity closes before the necessary developments have been implemented,” Klein, the academic, said.

Yen blamed a combination of brain drain and lack of incentives like income tax breaks and discounts on office space. Most of all, he said, the Vietnamese government needed to offer incentives for companies to hire and train fresh graduates into the industry. Over his years in the budding sector, he’s seen how profitable it could be for the country.

“A single chip design is like a rice seed. You come up with one variety and sell billions of copies; yet it’s much more profitable than selling rice,” said Yen, who hails from a family of paddy farmers.

“Vietnam has to be able to take ownership of their chip designs,” he said. “[Otherwise] we’re just laboring for the Americans.” 

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