Vietnam's semiconductor strategy: From vision to values

As a result, countries are no longer focused solely on economic efficiency. Instead, they are working to build their own semiconductor capabilities. The United States, European Union, Japan, India, South Korea, and China are all making massive public investments to reshape the global chip supply chain.

Vietnam, long recognized for its strengths in electronics assembly and testing, is now at an important turning point. Based on our experience advising foreign investors in Vietnam’s high-tech and digital sectors, it is clear that the country is entering a crucial stage in its semiconductor development. This is where long-term vision needs to turn into real action, and supportive policies are expected to drive tangible results.

Vietnam has a real opportunity to grow its role in the global semiconductor value chain. But success will depend on how effectively it delivers – through investment incentives, infrastructure improvements, and talent development.

From Vision to Strategy: The C = SET + 1 Formula

Vietnam’s ambition to rise as a vital player in the global semiconductor landscape is now codified through a national-level commitment. On 21 September 2024, the Prime Minister issued Decision No. 1018/QĐ-TTg approving the National Strategy for the Development of Vietnam’s Semiconductor Industry to 2030 with a vision to 2050. At the heart of this strategy is the formula: C = SET + 1, where:

• C stands for Chip;
• S for Specialized (Application-Specific Integrated Circuits);
• E for Electronics (as the foundational manufacturing base);
• T for Talent (engineers, researchers, technicians);
• +1 signifies Vietnam as a new, safe, and reliable destination in the global semiconductor supply chain.

This integrated approach reflects Vietnam’s understanding that becoming a semiconductor hub demands an ecosystem that blends technical specialization, supply chain depth, and a skilled workforce – all anchored in long-term policy stability and international cooperation.

Evolving inentives: From traditional incentives to sector-focused strategies

Historically, Vietnam has relied heavily on preferential tax holidays and reduced CIT rates to attract foreign investment. While those tools remain relevant, the government has clearly recognized that semiconductor investors – especially those in R&D, design, and advanced packaging – require more sophisticated and performance-linked support.

A major step forward is the introduction of Decree No. 182/2024/NĐ-CP, which governs the operation of the Investment Support Fund. This Decree allows high-tech projects, including those in the semiconductor industry, to access cost-based support from the State budget. For example, R&D centers in semiconductors may be eligible for subsidies covering up to 50% of their initial investment costs. Other projects may benefit from annual support linked to expenditures on training, R&D, equipment, manufacturing, and social infrastructure.

This marks a meaningful shift: incentives are now more closely tied to actual performance and contributions to the national socio-economic development.

Further institutionalization of this vision came with the adoption of the Law on Digital Technology Industry (Law No. 71/2025/QH15) in June 2025. Effective from 01 January 2026, this law creates a comprehensive legal foundation for the development of emerging technology sectors, including semiconductors (as summarized below). It defines key industry concepts, establishes conditions for investment, and introduces diverse support mechanisms – from corporate income tax (CIT) incentives and cost subsidies to customs facilitation and human capital development programs.

Together, these policies mark a decisive move from generalized incentives to a more sophisticated, sector-specific industrial strategy.

 (Source: Deloitte Vietnam’s Industry Insights Alert on the Law on Digital Technology Industry)

At the subnational level, local authorities are also becoming more active in policy design and delivery. Ho Chi Minh City, under Resolution No. 98/2023/QH15, has identified semiconductors as a strategic industry and is piloting several advanced incentive schemes. These include super-deductions for R&D costs, customs priority, workforce training support, and preparation of industrial power infrastructure to meet the high energy demands of semiconductor operations.

Da Nang, under Resolution No. 136/2024/QH15, is taking a similar approach – positioning itself as a hub for chip design and semiconductor services. The city is offering super-deductions (up to 150%) for R&D, land lease support, and simplified procedures for qualified investors.

At the same time, under the new Law on Digital Technology Industry, Provincial People’s Councils where semiconductor projects are located may stipulate the criteria, conditions, procedures, scope, and levels of subsidies from the local budget, in accordance with local circumstances, to support semiconductor projects.

This local-level leadership reflects a broader shift in Vietnam’s investment approach. Rather than top-down implementation, there is a move toward collaborative federalism – central strategy combined with localized execution. This flexibility and responsiveness to investor needs and local comparative advantages are essential to building a competitive semiconductor ecosystem.

Aligning with investor expectations

Global investors are taking notice of Vietnam’s evolving semiconductor policy landscape. The introduction of cost-based incentives marks a significant shift from the traditional reliance on tax holidays. However, policy clarity and execution remain critical.

Successful incentive implementation hinges on timing, transparency, and trust. Multinational investors need early-stage clarity on eligibility, mechanisms for application, and predictable disbursement.

Beyond incentives, investors are increasingly attentive to factors such as ease of doing business, streamlined regulatory procedures, and operational facilitation. Efficient customs clearance, visa and work permit policies for foreign experts, transparent land acquisition processes, and inter-agency coordination are all essential for Vietnam to meet global investor expectations.

Local governments now play a central role not only in land access and licensing but also in articulating bankable incentive packages. At the intersection of tax, investment, and regulatory policy, advisory professionals support investors in evaluating Vietnam’s incentive toolkit, particularly direct support tied to capital expenditure or employment, and aligning it with their global planning and compliance needs.

People and Platforms: Building the Talent Engine

Vietnam’s commitment to training 50,000 semiconductor engineers by 2030 demonstrates serious intent. However, this target should be coupled with reforms that ensure technical depth and relevance.

Leading universities need to develop focused semiconductor curricula while partnering with industry to offer hands-on training, internships, and lab sponsorships. Faculty-industry engagement should be encouraged to ensure academic programs stay aligned with real-world requirements.

In addition, vocational education should target support roles in semiconductor operations, including cleanroom technicians, QA specialists, and maintenance staff. National scholarship schemes linked to industry placement or overseas education can also help develop a long-term pool of highly skilled professionals.

Looking Ahead: Execution Defines Outcomes

Vietnam has made significant strides. A national strategy, enabling legal frameworks, and direct support mechanisms are now in place. Local governments are beginning to act with purpose. International investors are paying close attention.

The challenge now lies in delivery.

For the private sector, this is the time to explore Vietnam’s emerging incentive offerings and engage early with national and local authorities. Semiconductor companies should consider phased investment strategies – beginning with design or back-end activities while evaluating long-term opportunities in front-end processes.

For policymakers, the focus must be on implementation quality: issuing detailed guidance on incentive procedures, streamlining administrative processes, supporting industrial infrastructure development, and deepening international partnerships in education, research, and supply chain development.

Conclusion: Vietnam’s Defining Decade

Vietnam’s entry into the global semiconductor race is no longer theoretical – it is institutionalized in national strategy, legal frameworks, and initial implementation. The foundations have been laid.

But success in this sector cannot be built on policy declarations alone. It will depend on Vietnam’s ability to translate frameworks into functioning ecosystems, incentives into meaningful support, and talent initiatives into real workforce outcomes.

With coordinated action from government and industry, and continued refinement of its incentive delivery model, Vietnam has the potential to move from a promising alternative to a credible and strategic player in the global semiconductor landscape.

The next decade will be decisive.

Mr. Bui Tuan Minh, Country Tax & Legal Leader, Deloitte Vietnam