Ambitions for artificial intelligence in Vietnam depend on a significant tech firm valued at $8.8 billion.
Vietnam's Largest Tech Firm, FPT Corporation, Faces Challenges in Global Competition and Tariff Impacts
HANOI - FPT Corporation, Vietnam's leading technology firm, was founded four decades ago by Mr. Truong Gia Binh in a room loaned by his father-in-law, General Vo Nguyen Giap. The company, now Vietnam's biggest listed tech firm, is pivotal in the government's plan to develop a self-sufficient tech sector capable of competing with regional rivals, as Vietnam seeks to move beyond its image as a low-cost manufacturing hub.
FPT Corp has made some strides in achieving this goal, with 130 Fortune Global 500 companies, including Airbus, Halliburton, and Ford Motor, among its clients. The company has also partnered with Nvidia to build AI data centers in Vietnam and Japan, and is expanding its semiconductor chip design operations.
However, FPT faces significant hurdles in its quest to compete with established tech companies from India and Malaysia. The firm must also navigate the new era of tariffs initiated by US President Donald Trump. While not directly targeted, FPT may experience indirect impacts as many of its global clients are affected by these tariffs.
The company is addressing these challenges by cutting costs and diversifying its product offerings. FPT is investing in new technologies such as AI and semiconductors, opening a $174 million AI center, and planning further investments in high-tech manufacturing. Additionally, FPT is expanding its presence in foreign markets and forming strategic partnerships.
The government views FPT as a model to help Vietnam transition from its traditional manufacturing base to industries specializing in areas such as AI-related products. According to IDC Indochina managing director Lam Nguyen, "Developing a leading-edge technology sector is Vietnam's 'way out of being a low-cost economic hub'."
Despite these challenges, FPT remains optimistic about its future. The company aims for an annual revenue growth rate of approximately 20%, and Mr. Binh, who holds nearly 7% of FPT, is confident that FPT can maintain this growth rate. However, the company may need to contend with increased government regulation, as reports suggest that the Ministry of Public Security, which has been tightening internet regulations, seeks a majority stake in FPT Telecom, the company's internet unit.
Enrichment Data:- FPT recorded a 19% jump in full-year revenue to 62.85 trillion dong (approximately $3.12 billion) in 2024, largely due to contributions from its FPT Software unit.- FPT expects revenue from its Japan unit to reach $1 billion in 2027, up from $500 million in 2024, with the number of employees in Japan potentially increasing from 4,500 to 5,000 by 2025.- The government aims to have three AI centers and at least 100 chip design companies by 2030 in Vietnam, and a semiconductor industry with annual revenue of more than $100 billion by 2050. To this end, FPT has trained thousands of technologists at its five universities nationwide and set up 16 elementary to high school campuses for young children to learn programming languages.
- FPT Corporation, being a pivotal player in Vietnam's business and technology sector, is aiming to compete globally and move the country beyond its low-cost manufacturing hub image, even as it faces challenges from established tech companies like those from India and Malaysia, as well as the impacts of tariffs initiated by US President Donald Trump.
- Amid these challenging circumstances, FPT is strategically diversifying its product offerings, investing in new technologies such as AI and semiconductors, expanding overseas, forming strategic partnerships, and training thousands of technologists to prepare for a tech-driven future in line with Vietnam's government plans for a self-sufficient tech sector with at least 100 chip design companies and AI centers by 2030.
