Semiconductor industry in HCMC facing obstacles

The Ho Chi Minh City (HCMC) Department of Science and Technology has cooperated with the Management Board of Saigon Hi-tech Park (SHTP) to organize a summary meeting for the scheme ‘Incubating Domestic Semiconductor Businesses from 2017-2020’. Obviously, this industry has not been able to attract much interest from both investors and enterprises, leading to shallow development and a gloomy future.

SG8V1 chip by ICDREC is installed in the electronic meters. (Photo: SGGP)
SG8V1 chip by ICDREC is installed in the electronic meters. (Photo: SGGP)

HCMC People’s Committee on July 10, 2018 issued a decision for the launch of the scheme ‘Incubating Domestic Semiconductor Businesses from 2017-2020’. The Incubation Center of SHTP (SHTP-IC) is in charge of this project under the supervision of SHTP’s Management Board.

Reports show that in 2019, the commercialization of research results from this incubation brought VND19.6 billion (approx. US$851,000).

Director of SHTP-IC stated that the aim of the scheme is to form a foundation for the semiconductor industry in Vietnam, with a hope of effectively using research results of the field in domestic electronic, IT products. In turn, this will create a stable startup ecosystem for the lucrative semiconductor industry.

There have been 19 projects being incubated, all of which are supported in the intellectual property registration process. 10 companies have received a science-technology business certificate. Many of these projects have won prestigious awards, both international and national.

More remarkably, the total annual revenues of these projects reach nearly VND20 billion ($870,000).

To better support these project, SHTP-IC has formed a network of experts and partners from related businesses, investment funds, and educational institutes. Various events and contests have been held to increase the value and sustainable development of semiconductor companies.

Despite these efforts, there are still many limits which have negatively influenced the growth of the industry.

Firstly, projects taking part in the program have not used as many domestic integrated circuits (IC) for their products as expected. In addition, the quantity of semiconductor businesses is still quite low. Finally, the quality of the incubated projects is not satisfied enough while those projects are not synchronously launched in accordance with Decision No.4022 of HCMC People’s Committee.

Take the story of Le Trung Hieu – CEO of Ewater Engineering Co. Ltd – as an example. His enterprise is participating in the mentioned scheme. In 2017, it created a solution and device to limit heat waste inside boilers, using a domestic IC called SG8V1 by ICDREC. This device was then welcomingly exported to Malaysia as all parts have clear origin.

However, at present, since there is no more SG8V1 chip to install into the device, the company has to replace it with imported ones. Clearly, the action does not satisfy the client’s requests, and thus Ewater Engineering Co. cannot continue the transaction. What a pity it is!

As stated by Chairman of HCMC Semiconductor Industry Association Nguyen Anh Tuan, the difficulties come from both management and the continuous changes of the scheme.

Director of the HCMC Department of Science and Technology Nguyen Viet Dung shared that his department always support semiconductor businesses and research teams. However, in general, the development of this industry in HCMC has faced much indifference although it should have been promoted.

He insisted that it is time to boost the production of Vietnamese IC to answer the demands of the domestic market and to fulfill our own specific missions.

Head of SHTP’s Management Board Nguyen Anh Thi said that there must be long-term solutions to promote the incubation scheme for semiconductor businesses. It is challenging to compete with already renowned international corporations in the field, so Vietnamese enterprises should focus more on increasing the value and special features of their products, along with a closer cooperation among businesses of the industry to solve existing issues for a more sustainable development.

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