The image shows an illustration of a person making semiconductors

Geopolitical tensions drive onshoring and friendshoring and change the supply landscape

The semiconductor sector in Vietnam is receiving a boost in the chip war between China and the United States.

As tensions escalate in the ongoing semiconductor battle between China and the United States, Vietnam is emerging as a crucial player, offering tax exemptions and incentives to semiconductor companies willing to invest in the country’s burgeoning industry. The Southeast Asian country’s national chip plan includes grants and joint research initiatives with private companies such as FPT, to boost local R&D capabilities and increase localization rates in semiconductor manufacturing.

Although the export-oriented economy has lost significant investment from global giants such as Intel and AT&S, Vietnam has attracted several semiconductor companies, including Nvidia and Samsung, seeking to take advantage of its strategic location and growth potential. However, challenges persist: the need for technology transfer agreements and a skilled workforce remain critical to the sector’s development.

In line with its commitment to industry, Vietnam plans to train 50,000 engineers by 2030 and is integrating semiconductor education into university curricula.

The country’s commitment to fostering innovation in the semiconductor sector is underscored by its inclusion in national development programs, which offer grants and support through initiatives such as the National Science and Technology Development Fund and the National Product Program.

Meanwhile, with global demand for artificial intelligence chips steadily increasing, OpenAI CEO Sam Altman is seeking substantial investment to address chip limitations that are hindering the company’s growth. With plans to increase chip capacity, Altman stresses the need for a resilient supply chain and an expanded AI infrastructure to remain competitive in the global market.

While Vietnam and OpenAI are busy improving their semiconductor manufacturing capabilities, China's largest chip manufacturer, SMIC, is challenging U.S. sanctions to advance chip production capabilities. Despite challenges posed by export restrictions and outdated equipment, SMIC's efforts underscore China's determination to achieve self-sufficiency in semiconductor manufacturing, albeit with significant hurdles to overcome.

As the semiconductor landscape evolves amid geopolitical tensions and technological advances, Vietnam, OpenAI, and SMIC represent key players shaping the industry’s future, each facing unique opportunities and challenges in the pursuit of innovation and market leadership in the semiconductor industry.

The future of the semiconductor industry: opportunities and challenges for independent distributors

Product availability and price can fluctuate dramatically with changes in market dynamics and supply. An independent distributor, not bound by the directives of individual chip manufacturers, can offer a more comprehensive global perspective on supply conditions by closely monitoring changing geopolitical situations, trade tensions, and supply chain challenges and can therefore provide alternative sourcing and greater flexibility and resilience for its customers. At a time when instability is the new norm, having an independent distribution partner with a global view and adaptability becomes critical to navigating the unpredictability of the semiconductor market.

When you choose to source from Electronic Partner, you can be sure that everything possible will be done to ensure the authenticity of the products before you pay for and ship them.

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