[Column] Will Vietnam change ASEAN's growth pecking order. Semiconductor and human resource development advance the industry

✅ Roughly speaking

• 🇻🇳 Vietnam's strength is no longer limited to "low cost."
• 🎓 The focus on developing semiconductor talent and design and manufacturing appears to be changing the course of industrial advancement.
• 📊 In World Bank's 2026〜2027 classification, Vietnam is one of the countries that has transitioned to an upper-middle-income country.
• ⚖️ It is both a competitor for Malaysia and a force to be reckoned with in redesigning the regional division of labor.

Introduction

This time, last time " Why Malaysia's semiconductor industry is being reevaluated now. Current location as the center of ASEAN restructuring We will now explain Vietnam, one of the countries that Malaysia has covered that we should be most aware of.

If Malaysia is a country that is "advanced based on accumulation," then Vietnam could be described as "a country that is trying to climb the industrial ladder with momentum."
Looking at Vietnam in recent years, it seems that there is a growing desire to move beyond simply being a production base that provides cheap labor to a country with more advanced manufacturing and technological talent.

If we apply the auxiliary line I mentioned last time, "the middle-income country Wana," we can say that Vietnam is indeed a country that is trying to achieve high value-added growth at its entry point.

Why Vietnam has grown so present

First, it's worth noting that Vietnam has moved up one level in international income brackets.

World Bank's 2026〜2027 classification organizes five countries as having moved from lower-middle income to upper-middle income: Jordan, Micronesia, the Philippines, Sri Lanka, and Viet Nam (Source: World Bank ).
World Bank itself explains that this classification is based on per capita GNI (Gross National Income) for the previous calendar year and will serve as a reference point until the end of June 2027 (Source: World Bank ).

Of course, we cannot discuss a country's capabilities solely through changes in income brackets.
World Bank also specifies that thresholds are affected by inflation and exchange rate fluctuations each year, and that the 2025 data is an estimate and may be revised, so certain reservations are required when dealing with the figures (Source: World Bank ).
Nevertheless, this is one example of how Vietnam has become a growing country within ASEAN that cannot be ignored.

This is due to an export-led growth strategy.
Vietnam has reportedly signed trade agreements with countries and regions around the world, attracting foreign capital and consolidating production bases for electronic components and electrical equipment, thereby boosting its national income (Source: Nikkei Shimbun ).

Vietnam's semiconductor strategy doesn't end with simply attracting factories

In this article in the Nihon Keizai Shimbun, South Korea's LG Innotek announced that it will set up a semiconductor circuit board factory in Vietnam in June 2026, with an investment expected to be approximately $1 billion (160 billion yen) (Source: Nikkei Shimbun ).
It has also been reported that South Korea's Samsung Electronics and the US's Intel will establish new semiconductor-related bases and increase their capabilities in Vietnam (Source: Nikkei Shimbun ).

It's not just foreign capital.
Domestically, the Ministry of Defense-affiliated Viettel and the IT giant FPT have been reported to be interested in semiconductor production (Source: Nikkei Shimbun ).

It is important to note that Vietnam is trying to attract not only the labor-intensive post-process but also the pre-process, such as circuit formation, design, and development (Source: Nikkei Shimbun ).

If this direction becomes established, Vietnam could transform from a country that "assembles cheaply" to one that "incorporates more added value within the region."

Human resource development is what shows Vietnam's seriousness

When considering Vietnam's competitiveness, I feel that human resource policies are more important than just equipment or factories.

According to an article in the Nikkei, the Vietnamese government has announced a plan to train 50,000 semiconductor talent by 2030, and is working to improve semiconductor education at institutions such as Hanoi University of Technology (Source: Nikkei Shimbun ).
Additionally, Prime Minister Pham Minh Chinh (then) reportedly said at a meeting in August 2025 that semiconductors should be designed, manufactured and tested by 2027 at the latest (Source: Nikkei Shimbun ).

Not all of these policies will proceed as planned.
Nevertheless, it is clear that Vietnam's goal is not simple quantitative expansion, but rather the establishment of industrial capabilities, including design, manufacturing, and testing.

This also aligns with the point made by Senior Economist Varela, which I mentioned last time, namely that human resource education is essential for maintaining growth.

How to read the estimate "High-income countries in 1940"

The book also presents impressive estimates of Vietnam's future.
According to the Nikkei, local Thai newspaper Nation estimates that if growth continues at the same pace as the average over the past decade, Vietnam's per capita GNI will surpass Thailand's in 2037 and become a high-income country in 2040 (Source: Nikkei Shimbun ).

Thailand is the contrasting country here.
Thailand has not had a Med from moving out of middle-income countries since moving to upper-middle-income countries in 2011 (Source: Nikkei Shimbun ).
This is reportedly due to a slow development of cutting-edge industries such as semiconductors and digital, as well as an aging population that is aging faster than neighboring countries and a lack of engines for economic growth (Source: Nikkei Shimbun ).

This means that even in the same upper-middle-income country, the landscape beyond can change dramatically depending on whether or not it can incorporate cutting-edge industries.
Vietnam's calculations are merely based on certain assumptions.
Still, looking at it alongside Thailand's precedent, it's easier to understand why Vietnam is so hung up on semiconductors and human resources.

Vietnam's meaning from a Malaysian perspective

When looking at Vietnam from a Malaysian corporation's perspective, the important thing is not just the fear of being "pushed up."
I think it's about calmly considering where you can compete and where you can complement each other.
Vietnam is a country that is likely to leverage its momentum and the potential for new investment to become a force to be reckoned with.
On the other hand, Malaysia has the strengths of a long industrial accumulation, an English-language environment, an existing E&E (electrical and electronic, Electrical & Electronics) and semiconductor ecosystem, and a clear policy towards sophistication (Source: MIDA , NIMP 2030 ).
Therefore, it is conceivable that the two countries will not clash head-on in all areas, and that competition and division of labor may proceed simultaneously.

summary

If we simply understand Vietnam's rise as a country where labor costs are decreasing, it seems to misjudge its true nature.

In reality, Vietnam is trying to climb the industrial ladder by attracting foreign investment while broadening its focus to the preliminary process, design and development, and human resource development.
Vietnam is also listed as one of the countries that has transitioned to upper-middle income status in World Bank's 2026〜2027 classification (Source: World Bank ).

From Malaysia's perspective, Vietnam is both a threat and an essential part of considering ASEAN's new division of roles.
That's why I think the next place we should look is the Philippines, which is expanding its presence through another route.