Vietnam isn’t a country synonymous with advanced technology. Its most widely-known exports remain basic goods such as rice, fruit and textiles. However, several of the world’s biggest tech companies have major presences here, and ambitious plans are underway to turn Vietnam, and specifically Ho Chi Minh City (HCMC), into a high-tech hub.
HCMC has something of a head start on the rest of the country in the high-tech hub stakes thanks to the Saigon Hi-Tech Park (SHTP), a sprawling, well-manicured industrial park located in the city’s eastern outskirts that has attracted nearly US$5 billion in investment from roughly 100 multinational companies.
Last year Samsung, the largest individual foreign investor in Vietnam, expanded its investment in the park to $2 billion to build the Samsung Electronic Ho Chi Minh City Complex (SEHC). The facility will feature the research and development of high-end TVs, as well as the production of TVs and other consumer electronic products, in the process creating 15,000 jobs.
Meanwhile Intel, who had been the largest investor in the SHTP until Samsung’s expansion, added a second production line at its semiconductor chip factory in 2014. Intel expects that 80 per cent of its chips sold worldwide will be made in Vietnam in the very near future.
HCMC’s Silicon City
The presence of such facilities gives HCMC a strong base in the production of electronic components designed elsewhere. But one upcoming project aims to create a space where Vietnam can move up the global supply chain and create home-grown innovations.
Called Saigon Silicon City, the $40 million project is expected to be completed in 2020. Spearheaded by Nguyen Minh Hieu, a Vietnamese-American entrepreneur, the project is modelled on northern California’s Silicon Valley and is expected to attract domestic and international investment.
According to Saigon Silicon City’s Marketing Department, the project was made possible thanks to government policies intended to spur the development of Vietnam as a high-tech hub. “As the park (SHTP) represents an important national interest, the city and central governments have laid out an aggressive package of fiscal incentives for investing enterprises,” a spokesman told AEC News Today via e-mail.
The government has also committed “to a policy of one-stop and fast-track public administration services”. In the long term, “the project will integrate research, development and applications to turn out products and services.
Of course, the project does face challenges given its nature, which is unprecedented in Vietnam. “We expect to encounter initial difficulties due to the lack of an organic ecosystem for high-tech operations,” said the SSC in a statement. However, the SSC expects these issues to gradually dissipate as more businesses invest in the project and the required expertise is accumulated.
Such projects will also benefit from the Trans-Pacific Partnership (TPP), a major trade agreement among 12 Pacific Rim countries, including Vietnam, which was signed in February.
“An estimated 18,000 tariffs will be slashed among the 12 participating countries… the Vietnam tech industry will finally enjoy good sources of raw materials in global supply chains and will get wide-open access to developed markets for their products,” said an SSC spokesman.
Vietnam’s Human Resources Gap
Although the projects discussed above will give HCMC the infrastructural base it needs to move up the high-tech value chain, one major obstacle remains: Vietnam’s lacklustre human resources, particularly when it comes to digital training and education.
While Samsung and Intel’s plants employ an army of local workers nationwide, these workers are not developing new innovations, they are simply building what has already been designed. The country is simply not yet capable of producing the sort of game-changing software and hardware that has allowed America’s Silicon Valley to become a world beater.
Both Vietnamese and international experts recognise this deficit, and have called for improvements in science and technology education. Such structural changes take much longer to come to fruition than the construction of a factory, so it is likely Vietnam will continue to be handicapped well after projects such as Saigon Silicon City are completed.
Nonetheless, the determination of the government at all levels to diversify Vietnam’s economy, as well as the multi-billion-dollar confidence major companies such as Samsung and Intel have shown in HCMC, prove that Vietnam’s high-tech hub plans are more than just silicon dreams.
- Viet Nam needs to improve sci-tech capability: experts (Viet Nam News)
- 80% of world’s computer chips will be made by Intel Vietnam by 2015: CEO (Tuoi Tre News)
- Samsung ups investment in southern Vietnam project to $2 billion (Tuoi Tre News)
- First sod turned at Vietnam’s ‘Silicon Valley’ (Tuoi Tre News)
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