With US-Vietnam ties peaking, Hanoi sees greater opportunity to build high-skilled workforce
Jamille Tran
[HO CHI MINH CITY] Now that Vietnam and the United States have elevated bilateral relations to the highest level, the two countries are looking at ways to grow a more skilled workforce in Vietnam, to meet a severe talent shortage in the high-tech sectors.
There has been both excitement and optimism in the air since US President Joe Biden visited Hanoi last week and met Vietnam’s top leaders. The highlight of his trip was the announcement that Vietnam and the US raised ties by two notches, to a comprehensive strategic partnership.
This brings Washington to the highest tier that Vietnam currently has with only China, Russia, India and South Korea.
Besides security implications, observers believe that the new status holds significant economic importance for both countries. The US is currently Vietnam’s largest export market, with annual bilateral trade exceeding US$100 billion.
As part of Biden’s visit, the US and Vietnam signed a deal on semiconductor supply chains to expand Vietnam’s semiconductor ecosystem.
The White House said in a statement that the US government affirmed its commitment to increase support for Vietnam in the training and development of a high-tech workforce. Washington will also provide seed funding of US$2 million to train Vietnamese workers in chip assembly, packaging and testing.
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Vietnam is regarded as a crucial node in the US’ global semiconductor supply chain, supplying about 10 per cent of the US’ total imported chips in recent months.
Vietnam mainly participates in the back-end stage, such as chip assembly and testing. These are lower-value activities compared to chip design and fabrication, which are still mostly done overseas.
With Vietnam looking to build its first semiconductor fabrication plant and make the most of the influx of investments from US tech firms, Prime Minister Pham Minh Chinh in August directed officials to develop a plan to train 30,000 to 50,000 semiconductor engineers.
According to some estimates, the current manpower in Vietnam meets just about 20 per cent of the semiconductor industry’s needs.
There are many other high-tech sectors, such as battery-making, that are also suffering from a talent crunch.
VinES Energy Solutions – a unit of Vietnam’s largest private conglomerate Vingroup – initially struggled to hire enough people to man its electric vehicle (EV) battery manufacturing factories, said Nguyen Dinh Thu, a senior investment manager at VinES.
“In my opinion, the current quantity of high-skilled professionals in Vietnam is not enough to meet the demand of large-scale factories (for high-tech products),” he said at the Vietnam-US Trade Forum on Wednesday (Sep 13) in Ho Chi Minh City.
“Manufacturing firms in Vietnam need to plan a systematic road map to build a pipeline of high-quality personnel for future expansion and increasing competition,” he added.
Creating jobs is ‘two-way game’
The demand for local skilled workers is high in Vietnam. This is especially so as many US tech giants including Intel, Dell, Google, Microsoft and Apple have all announced in recent months that they will set up operations in Vietnam or expand their production facilities there.
Amkor Technology is building a US$1.6 billion semiconductor packaging facility in northern Vietnam, while some other US chipmakers are planning new semiconductor design centres in Vietnam’s southern metropolis.
On the flip side, Vietnamese automaker VinFast began the construction of its US$4 billion EV manufacturing plant in North Carolina in July this year, as part of the company’s global expansion plans. This modern facility is expected to “create thousands of good-paying jobs” in the state, said North Carolina Governor Roy Cooper at the groundbreaking event.
State-run carrier Vietnam Airlines has also signed a US$7.8 billion deal to buy 50 planes from Boeing, a move that is expected to support over 33,000 jobs in the US.
Boeing has also finalised the delivery plan in the next five years for 200 planes purchased by Vietnam Airlines’ rival Vietjet, with a total value of US$25 billion.
“This is a two-way game… We hope that with such purchases of aircraft, Boeing could favour suppliers from Vietnam,” Truong Thi Chi Binh, vice-president and general secretary of the Vietnam Association for Supporting Industries, said at the Vietnam-US Trade Forum.
She noted that while many Vietnamese firms have been able to join the global manufacturing supply chains in sectors such as electronics, the aerospace industry is on a “whole other level” and largely out of reach for many domestic suppliers.
She added that Vietnam companies have the edge over their counterparts in countries like India and China when it comes to multi-stage production that requires a combination of skilled labour and automatic machines.
Speaking at the same forum, Maxime Dourdan, supply-chain business development manager for Boeing, said that the company has been encouraging its suppliers in Japan and South Korea to invest more in Vietnam, to reduce the cost of production, as well as tap Vietnam’s strong engineering capabilities.
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