FPT Corporation focuses on AI and chip expansion

September 18, 2023 | 17:04
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FPT Corporation has reported orders nearing 70 million chips by 2025 and is setting its sights firmly on the expansion of AI, according to Reuters.
FPT Corporation focuses on AI and chip expansion
FPT University

Truong Gia Binh, chairman of FPT, expressed confidence in Vietnam's capacity to forge a formidable stance in the AI sector. "Vietnam, much like FPT, possesses an inherent potential to undergo even more rapid development in the digital technology sector," Binh said.

FPT has also revealed a partnership with US-based Landing AI. Furthermore, discussions have been initiated with AI powerhouse Nvidia and other Vietnamese enterprises to harness AI for cloud storage, healthcare, and diverse applications.

In an interview with Reuters, Binh shed light on emerging opportunities predominantly in the semiconductor space, stemming from the CHIPS Act passed by the US last year.

“This is a game-changer,” he said.

He believes that it paves the way for international partners, alongside China, to expand development capabilities. The US' commitment to propelling Vietnam's chip sector is a testament to this.

While FPT had previously announced orders for over 25 million chips by 2025, Binh disclosed a revised figure of 67 million for the same period. These chips, intended for clients in Taiwan, South Korea, and Japan, will cater to the medical equipment domain and various electronic applications.

In a recent interview with local media Tuoitre, Tran Van Khoa, CEO of FPT Group, said, "In the tech sector, Vietnam is rapidly emerging as a global contender, especially in the semiconductor battleground. The production of chips requires advanced technology and specific raw materials, notably inert gases and rare earth elements. While traditionally dominated by exporters like China and Russia, the shifting geopolitical dynamics have spotlighted Vietnam's untapped reserves of these rare earths."

Counter to the prevailing trend wherein most assembly of products in Vietnam relies on technology sourced from other developed nations, FPT's chips are designed and manufactured either in South Korea or Taiwan. This represents an inverse supply chain approach compared to tech giants like South Korea's Samsung, which assembles nearly half of its smartphones in Vietnam.

Binh envisaged the possibility of relocating chip manufacturing operations to Vietnam within the next five years, citing escalating interest and the potential to entice foreign investments for establishing Vietnam's maiden chip manufacturing plant.

Binh remarked that FPT's current expansion strategy did not encompass a public listing in the US.

"Perhaps someday," he said, noting the absence of any concrete plans at present.

FPT boasts a US revenue ranging between $250 million to $300 million annually, aiming to amplify this figure to $1 billion by 2030.

"A US listing might only be contemplated once we achieve a more significant scale and will also hinge upon customer demand," Binh said.

Meanwhile, Khoa noted that this year, FPT aims to reach a revenue milestone of $1 billion solely from international markets.

"We are in the final stretch, striving to accrue $1 billion in revenue from executed contracts overseas, which is made from Vietnamese intellect. And soon enough, we'll be racing towards the $2 billion mark," he said.

Highlighting a need for more significant investments in educational services, Binh shared that FPT has already onboarded thousands of students in its education sector. The firm aspires to maximise training output in Vietnam's chip engineering workforce, which experts reckon needs to decouple in the forthcoming decade, reaching a workforce of 50,000.

Binh also voiced his readiness to spearhead this initiative, expressing hope that the US would offer more than the funding announced earlier this week as bilateral relations with Vietnam are elevated.

JPMorgan predicts that FPT University could enrol up to 200,000 students by 2025, a substantial leap from nearly half that figure last year.

On the other hand, in late August, there were some rumours regarding FPT's alleged plans to issue shares to foreign investors at a price of VND140,000 ($5.91) per share.

Speaking to VIR, Nguyen The Phuong, deputy CEO of FPT said, "These speculations are baseless. At present, we have no plans for any capital mobilisation involving foreign investors for either FPT or FSoft."

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