Vietnam’s ambitions in the semiconductor space demand that the country’s manufacturers invest in bolstering their capabilities.

Coherent, a global semiconductor giant with operations spanning 117 locations
in 25 countries and territories, has been steadily deepening its footprint in Vietnam
and now employs some 2,000 people in the country, a figure that Mr. Steve Rummel,
Senior Vice President of Engineered Materials at the Coherent Corporation, expects
“to grow to more than 6,000 by fiscal year 2028.” He credits this ambitious growth
to Vietnam’s increasingly dynamic industrial ecosystem – a blend of the government’s
competitive incentive policies, proactive local support, and the rollout of modern,
green, and energy-efficient industrial parks.

As more leading global corporations set up operations in Vietnam, demand for
advanced manufacturing capacity, technical expertise, and a robust supporting ecosystem
is rising sharply. For businesses around the country, this wave of transformation
presents not just a challenge but also a defining opportunity – to step into the
high-tech arena and move beyond the boundaries of traditional manufacturing.

Semiconductors on the rise

Mr. Rummel pointed to what he called a “crucial factor” behind Coherent’s long-term
commitment to Vietnam – the country’s strengthening protection of intellectual property.
“This is absolutely essential for us, as much of Coherent’s core process lies in
proprietary know-how,” he explained. “In our more than 20 years of operations in
Vietnam, many of our innovations and breakthroughs have come from our local teams.”

Coherent first set foot in Vietnam in 2005, with a facility at the VSIP Industrial
Park in southern Binh Duong province (now part of Ho Chi Minh City). From that modest
start, its operations expanded rapidly. In 2024, the company launched a new facility
in neighboring Dong Nai province – a VND3 trillion ($115 million) investment completed
in just 18 months – to strengthen its semiconductor manufacturing capacity. The
47,000 sq m plant currently employs around 200 people and will continue to expand
as new product lines come into being.

Building on Vietnam’s maturing industrial ecosystem and a rising generation
of skilled engineers, Coherent has broadened its scope beyond its original manufacturing
base. Today, it produces everything from silicon carbide substrates for semiconductors
and precision opto-mechanical assemblies to ceramic components used in chip-making
equipment. “These products demand highly-specialized skills, such as laser machining,
ultrasonic processing, and diffusion bonding,” Mr. Rummel said. “That’s why we
are partnering with universities to develop tailored training programs that cultivate
a new generation of top-tier engineers.”

He emphasized that this collaboration is part of a broader vision. “Coherent
is deeply intertwined with Vietnam’s semiconductor ecosystem and will continue to
invest strongly to grow alongside the country’s development,” he affirmed.

Meanwhile, Mr. Samson Khaou, Executive Vice President, Asia-Pacific, at Dassault
Systèmes, noted that the French technology powerhouse has been present in Vietnam
for two decades through its partner network. In 2022, just after the pandemic, the
company established an official office in Vietnam – “a decision rooted in our confidence
in the country’s vision and growth strategy,” he said. “The next chapter in our
journey is to help shape what we call the ‘generative economy’, where the real and
virtual worlds converge, powered by generative AI.”

Under this new model, he continued, value creation shifts from physical products
to immersive, software-defined experiences. He believes businesses will move from
linear operations to “generative enterprises”, where human and virtual workforces
collaborate seamlessly with AI assistants.

Dassault Systèmes sees 3D universes – safe virtual environments where companies
can design and test digital twins of products, processes, or even entire factories
– as a foundation for the next wave of industrial innovation. “We aim to lead the
world in industrial AI, and Vietnam’s AI vision aligns perfectly with our global
strategy,” Mr. Khaou said. “That’s why we are committed to being a long-term, trusted
partner of Vietnamese industries.”

Becoming a tech gateway

Another major semiconductor equipment maker, BE Semiconductor Industries (Besi),
has also placed Vietnam on its global map. Specializing in backend semiconductor
equipment and expanding into the frontend segment, Besi began building its manufacturing
capacity in Vietnam two years ago, complementing its hubs in Malaysia and China.
According to Mr. Henk Jan Jonge Poerink, Senior Vice President for Global Operations
at Besi, Vietnam’s emergence marks a significant opportunity for local companies
to plug deeper into the global semiconductor supply chain.

Besi’s operating model is highly specialized: research and development
(RD), along with new product design, are based in Europe in three main centers;
maintenance engineering is carried out in Singapore; and all manufacturing is concentrated
in Asia, now including Vietnam. This expansion reflects the growing demand in the
semiconductor industry, where equipment spending is projected to surpass $1 trillion
over the long term.

According to Mr. Poerink, to join Besi’s supply chain, Vietnamese companies
must meet two key areas of capability: manufacturing and technical expertise. Suppliers
must be able to design modules, conduct rigorous testing, use materials to exact
standards, manufacture precision mechanical parts and cables, and manage a flexible
supply chain. Every module delivered to Besi must pass strict inspection before
approval.

These complex systems demand suppliers with advanced technical skills and internationally-compliant
manufacturing standards. The company’s strategy in Vietnam will follow a phased
approach: starting with specialized tooling, then producing key components, and
ultimately assembling complete systems for both domestic and global markets. This
approach underscores the strong demand for local suppliers capable of meeting global
technical and quality standards and willing to invest in precision technology; a
critical step in positioning Vietnam as a strategic link in the global semiconductor
equipment value chain.

Global semiconductor companies place similar requirements on their partners
in Vietnam. Mr. Yang Tong, Senior Director, Supplier Account Management, Global
Supply Chain, at Applied Materials, said that to become a supplier, companies must
meet the sector’s exceptionally high standards, which demands precision, speed,
and reliability far beyond most others.

Applied Materials operates large-scale production facilities in the US and
Singapore, with additional plants in Germany, Israel, Italy, South Korea, and Taiwan
(China). The company generates some $27 billion in annual revenue, invests 10-15
per cent in RD, and employs 35,000 people in 24 countries and territories.
Mr. Tong explained that its multi-tiered, highly-specialized supply chain requires
partners capable of ultra-precision machining, component handling and packaging
in Class 100 cleanrooms, and high-speed operations that fully comply with technical
standards.

Its equipment is made up of thousands of components, so precision in every
detail isn’t just an advantage it’s the minimum requirement to ensure quality and
reliability, Mr. Tong added.

Speaking to Vietnam Economic Times / VnEconomy, Mr. Clark Tseng, Vice President
of Market Intelligence at SEMI, said that as Vietnam’s chip design capabilities
develop, corresponding manufacturing capabilities will naturally follow. He believes
that Vietnam’s infrastructure is fairly strong compared with other emerging markets
but stressed that the government must continue investing. “Good infrastructure creates
the right environment to attract more foreign investment, especially in semiconductor
manufacturing,” he said, adding that this will further improve the overall ecosystem.

Experts emphasize that to meet the demands of global semiconductor companies,
Vietnam must continue investing in ultra-precision manufacturing, advanced surface
processing, strict cleanroom management, and specialized material supply chains.
For traditional manufacturers, these requirements are a significant challenge, but
they also represent an opportunity to enter the advanced semiconductor equipment
sector.

VET-Huyen Thuong