Quality must come first in chip mission

November 11, 2024 | 10:33

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Companies involved in Vietnam’s promising semiconductor manufacturing industry have described how they are going about business and outlined what else must be done for them, and the country, to succeed.

The SemiExpo event was the first of its kind in Vietnam, photo: NIC

At last week’s panel discussion on opportunities in semiconductors at the SemiExpo Vietnam event at Hoa Lac High-Tech Park in Hanoi, experts noted that the semiconductor equipment manufacturing supply chain was huge, with the participation of many enterprises from around the world.

Amid the booming global semiconductor industry, Vietnam is striving to become a hub for supplying raw materials, components, and assemblies for the semiconductor equipment manufacturing industry, entering the value chain of the global semiconductor equipment industry.

BE Semiconductor Industries NV (BESI) from the Netherlands plans to inject a further $42 million into its factory that produces equipment for the microchip packaging and testing process in Saigon High-Tech Park, following the inauguration of a 2,000 square-metre plant.

Steven Lim, vice president of BESI’s Strategic Project, said, “We are excited to set foot in the Vietnamese semiconductor market. The reason that we came here is to follow our customers, and Vietnam is emerging as an attractive destination for the semiconductor supply chain, particularly in precision engineering.”

Despite operating in Vietnam for a few months only, BESI has found that Vietnamese enterprises in the field have made good progress, and the personnel and infrastructure serving the semiconductor industry is getting much better.

“BESI is a pioneer equipment manufacturer here, though the semiconductor supply chain here is quite young, so we need many local suppliers and to have a plan to support and train them on working processes and qualification management,” Lim said.

“The next years will be a strong development period for this industry. We should work and cooperate closely to enjoy and grow together. Supporting industry is expected to contribute up to 90 per cent of the equipment value of the final product, a huge opportunity for Vietnam.”

Meanwhile, Hans Duisters, CEO and founder of Sioux Group, said that Vietnam had met the manufacturing demands of Sioux, a maker of high-tech equipment, and each component for semiconductor equipment also had its own supply.

“Vietnam has clear goals and strategies to develop human resources for the semiconductor industry, and it has been successful in implementing it all. This is why we chose the country as an investment destination for developing the semiconductor software design sector,” Duisters said.

Andrew Goh, corporate vice president and general manager of Lam Research Southeast Asia, said that the company had a factory in Malaysia to produce thousands of components and parts, which were very sophisticated with its own criteria and requirements.

“We are considering working with Vietnamese businesses to outsource some modules or tasks and then ship to Malaysia for assembly,” Goh said.

However, Goh added, building a support ecosystem for the semiconductor industry, especially in equipment manufacturing, is necessary. “Connection and cooperation between domestic and foreign enterprises will be a key factor in improving the competitiveness and sustainable development of Vietnamese enterprises and further expanding the semiconductor industry,” Goh explained.

Nguyen Trung Kien, vice chairman of CNC Tech Group, said that the company received its first orders related to semiconductors five years ago. CNC Tech provides drawings for semiconductor equipment manufacturers, in addition to mould making, plastic, and electronic assembly.

“To maintain orders from partners, attitude is a key factor, even on a minimal scale of just a few components. We are always learning, and improving quality and implementation,” Kien said. “However, the gap between local and foreign businesses is large. To push Vietnamese enterprises to join the global supply chain, narrowing this gap is necessary, and we need some help from the government.”

At last week’s event, Dutch Ambassador to Vietnam Kees van Baar said that the nation can fully utilise and develop the existing supporting industry to participate more deeply in the value chain.

“Equipment manufacturing is the pillar of the Dutch semiconductor industry, and the Netherlands is ready to cooperate with Vietnam to contribute to the overall development of the global semiconductor industry. With an abundant human resource base and competitive production costs, Vietnam is capable of exploiting these opportunities to grow strongly,” he said.

It was made clear at the event that Vietnam still has a lot of work to do if it wants to keep up with or surpass other countries in this endeavour.

Lim from BESI said that the production of semiconductor equipment had gradually changed to much smaller items that involves extreme temperature manufacturing, which cannot be carried out easily as it required high-precision machines.

“To join the supply chain, Vietnamese vendors have to strictly follow up the process, ensure quality, and not outsource modules to third parties to ensure maximum quality. Therefore, BESI vendors have to invest and develop a fairly comprehensive and complete production line to join a semiconductor supply chain,” Lim said.

Goh from Lam Research added that with tech changing rapidly every year, suppliers had to train their employees and meet standards very early on.

“The ability to update and adapt is essential for all suppliers. We highlight transparency, and communication with all parties to share concerns and overcome difficulties together,” Goh said.

“The government should provide some help for small- and medium-sized enterprises to improve skills, standardise processes, and get certificates to easily join global semiconductor supply chains.”

SEMIExpo Vietnam 2024 to reaffirm Vietnam's semiconductor ambitions

On November 7 and 8, SEMI, a leading microelectronics industry association, together with the National Innovation Centre, and the Ministry of Planning and Investment, will host the SEMIExpo Vietnam 2024 at Hoa Lac Hi-Tech Park in Hanoi.