Semiconductor Thought Piece - Vietnam poised to tap into semiconductor global value chain

In this report, we provide an analysis of the global semiconductor value chain and prospects of Vietnam’s semiconductor market. We raised our target price by 18% and reiterate our BUY rating for FPT (TP of VND125,500), the only listed tech firm that has direct exposure to semiconductor production.

The semiconductor industry plays a critical role in today’s technology-driven world. The semiconductor (or integrated circuits – IC) is the brain of the modern world, an integral piece of artificial intelligence (AI), 5G communications, cloud computing, the Internet of Things (IoT), autonomous driving, and countless other applications. According to technology market research firm Technavio, the global semiconductor industry was valued at USD574bn in 2022 and can achieve USD730bn in 2026 with a CAGR of 5.1% in 2022-2026. 

The semiconductor supply chain is complex and spans across the world. According to the Semiconductor Industry Association, semiconductors were the 4th most traded product globally in 2022 with nearly USD1.5tn in annual global trade flows. No region possesses the capability to produce all critical types of semiconductors. Instead, the globally distributed, highly efficient, and innovative semiconductor value chain as it exists today has emerged out of close cooperation and collaboration coupled with competitive pressure to innovate.

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