Following Intel, many large information technology (IT) corporations worldwide are expected to invest in Vietnam, predicts Mr. Than Trong Phuc, General Director of Intel Vietnam and Indochina.
Intel is a corporation that has recently been granted an investment license to build a semiconductor assembly and testing plant in the Ho Chi Minh City High-Tech Park (SHTP).
Mr. Phuc stated: “Intel’s investment in Vietnam has made a significant impact in the global IT community. The Intel plant project has attracted strong attention and has specific impacts on the business strategies of other multinational IT companies in the Vietnamese market.”
According to the investment license, in the first phase, Intel will invest $300 million in the plant for complete end products from wafers (ATM). The plant is expected to be operational by the end of 2008.
Mr. Phuc remarked: “In the trend of market expansion, multinational companies in the IT sector will seek locations that meet their strategic needs. Looking at the broader picture in the Asian market, IT is developing robustly in two major hubs: China and India. However, to mitigate risks and seek new markets, most multinational companies share a common formula: “China + India + 1”.
“Intel’s recent decision to invest in Vietnam may be a great opportunity for Vietnam to position itself as the number one alongside China and India,” Mr. Phuc added.
He also noted that there are several reasons that make Vietnam a new attractive destination for multinational IT companies. Vietnam has a rapidly growing and stable economy, a strategic geographical location, low labor costs, a young workforce, and good market development potential.
To adequately prepare for the upcoming wave of IT investment, Mr. Phuc believes Vietnam needs to train and develop its internet infrastructure more quickly, expand the legal environment related to investment and technology development issues. Additionally, Vietnam needs to train its workforce to meet the ever-increasing market demands.
Moreover, according to Mr. Phuc, Vietnam needs to ensure a good infrastructure foundation such as stable cost levels, a favorable legal framework, and a transparent financial environment. The government should also focus on encouraging venture capital investment. This is essential for training and developing “made in Vietnam” intellectual resources for the IT sector.
“Vietnam has a good seed but needs good water to nurture that seed to grow strong,” Mr. Phuc commented.
Meanwhile, Mr. Christophe Desriac, General Director of Microsoft Vietnam, stated: “With a population of 82 million and the potential for IT development among the youth, Vietnam is a highly promising market for Microsoft. Therefore, Microsoft’s senior leaders are always interested in collaborative programs with Vietnam aimed at narrowing the global digital divide, as initiated by Microsoft Chairman Bill Gates.”
He added: “Vietnam can absolutely become one of the countries with the fastest IT development rates in the region. The coming years are a very crucial period for Vietnam in developing its IT industry.”
According to Mr. Desriac’s assessment, compared to some other countries in the region, Vietnam’s investment environment is quite safe from a security standpoint. This is a timely advantage for Vietnam to attract more investments in high-tech sectors.
“Vietnam’s accession to the World Trade Organization (WTO) in the near future will positively impact the development of Vietnam’s IT and communications sector. Once a WTO member, foreign investors will feel more secure regarding the investment and business environment in Vietnam. This is akin to a market with an international investment certification, ensuring long-term cooperative development with partners in Vietnam,” Mr. Desriac said.
Meanwhile, Mr. Subra Venkatakrishnan, Software Director of IBM Vietnam, considers Vietnam an emerging market, with GDP growth rates reaching 7-8% per year, ranking second in Asia after China. Vietnam has a young and dynamic workforce, a stable society, and strong government support for the IT sector.
At the 5th ASEAN Telecommunications and Information Technology Ministers’ Conference (TELMIN-5) held in Hanoi in September 2005, Deputy Prime Minister Nguyen Tan Dung affirmed that for Vietnam, developing IT and communications is regarded as one of the top national policies in its development strategy and as a key factor in striving to eliminate poverty.
According to the Deputy Prime Minister, the Vietnamese government identifies IT and communications as one of the most important driving forces for development. The application and development of IT and communications contribute to promoting innovation, rapidly developing and modernizing economic sectors, enhancing the competitiveness of enterprises, effectively supporting the proactive integration into the global economy, improving the quality of life for the people, ensuring security and defense, and successfully realizing industrialization and modernization efforts.
However, according to Mr. Venkatakrishnan, the Vietnamese workforce still lacks experience, particularly in multicultural working environments. IBM addresses this issue by developing a learning environment and career development programs.
IBM has operated in Vietnam since 1938 until 1975. In 1993, IBM began to re-enter the Vietnamese market, and in 1996, IBM established IBM Vietnam, focusing on IT services. In recent years, IBM’s revenue in Vietnam has continuously grown at a rate of 30% per year, higher than the market average.
