Vietnam finds a formula – C = SET + 1 – to grow its semiconductor industry to $100bn

It only adds up to being as big as Nvidia today, in 2050

The Vietnamese government claims to have found a magical mathematical formula that will elevate its semiconductor industry to an annual turnover of $100 billion by 2050.

The formula, as approved by prime minister Pham Minh Chinh – a bit of a boffin himself, having achieved his bachelor's degree in civil engineering – is C = SET + 1.

Confused? It's simple. C is for Chips, S for Specialized, E for Electronics, T for Talent – and + 1 for Vietnam.

The mathematical gimmick is intended to represent Vietnam's effort to "become a new and safe destination of the global semiconductor supply chain."

Algebra aside, Hanoi's multi-decade strategy will roll out in three phases.

The first takes place in the remainder of the 2020s and will see Vietnam aims to leverage its geopolitical advantages and workforce to attract foreign investment, establish itself as a semiconductor talent center, and develop basic capabilities in R&D, design, manufacturing, and testing.

Goals include forming at least semiconductor 100 design firms, one manufacturing facility, and ten testing plants. The semiconductor workforce is slated to include 50,000 engineers and graduates – some of whom will come from a pool of 700,000 in adjacent industries after retraining for chips.

The industry is expected to draw in annual revenues exceeding $25 billion.

From 2030 to 2040, the nation will work to become a more self-reliant global center for semiconductors and electronics. It hopes to double the number of design firms, manufacturing plants, and available talent. Testing facilities are scheduled to increase to 15 while revenues are hoped to rise to over $50 billion for semiconductors and $485 billion for electronics.

The final phase culminates in the year 2050, when Vietnam expects to be an industry world leader and have mastered semiconductor R&D. Local design firms should number at least 300, while three manufacturing factories and 20 packaging and testing plants dot the landscape. Annual revenues for semiconductors are expected to reach $100 billion, while electronics should reach $1.045 trillion.

This is not the first time Vietnam has expressed its interest in becoming a semiconductor hub. It's also not devoid of existing foreign investment. Foxconn leased 45 hectares of land in an industrial park last year, while Intel and Samsung have invested in the past.

Vietnam’s semiconductor-derived revenue for this year is projected to reach $18.23 billion, well behind China’s $177.8 billion. So Vietnam has a way to go.

The nation’s ambitions also look modest compared to rivals: the likes of TSMC and Intel already have plans to build more than the three manufacturing plants Vietnam expects in the 2040s. And that $100 billion revenue target is roughly equivalent to Nvidia’s current revenue. ®