From Export Engine to Tech Machine?
Vietnam's shift begins
A belated Happy New Year - or early Lunar New Year! Welcome to The Ascent, your monthly inside look at Vietnam’s tech frontier from AVV. As experienced early investors in some of the country’s most iconic companies, we see shifts before they hit the headlines. Each issue distills what’s changing, why it matters, and where the next opportunities are.
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Let’s get into our focus for this edition: Vietnam’s attempt to spur home-grown, world-class tech innovation.
Vietnam kicked off 2026 with a headline that would be the envy of most economies: 2025 GDP growth of just over 8%, accelerating from 2024, even as U.S. tariffs hung over exporters.
In an exhibit of impressive resilience, exports rose about 17% to US$475 billion, including a record US$153 billion to the U.S. That, in turn, drove a record surplus with the U.S., in spite of the Trump administration’s efforts to rectify trade imbalances.
This comes amid the Communist Party of Vietnam’s National Congress, where leaders are discussing a new growth model for the country in line with what General Secretary To Lam has called Vietnam’s ‘Era of National Rise.’
So, the big question: How does Vietnam convert an export-led growth model into a tech-led value chain upgrade on its own terms?
A string of stories from the last few weeks shows that Vietnam is attempting to answer that question in several ways: legal frameworks that encourage risk-taking, sandboxes that push technology into real environments, and long-term (risky) bets like semiconductor fabrication, alongside the early formation of governance norms in digital assets.
Let’s go through a few of these.
1) The power of sandboxes
Ho Chi Minh City’s first drone-delivery trials made headlines with real-world cargo: an iPhone and coffee. The city’s Department of Science and Technology, in collaboration with the Saigon Hi-Tech Park and private firms, ran controlled tests under a regulatory sandbox.
A 200-meter autonomous delivery flight is far from groundbreaking, but repeatable pathways starting with such low-risk steps could lead to real commercialization: permits, standards, supervision, liability, and operational playbooks that let innovation scale safely.
City officials are already considering much longer drone delivery routes, potentially within this quarter. Da Nang, meanwhile, approved the country’s first cypto asset conversion pilot in August. Basal Pay allows for cross-border payments via stablecoins, though within strict regulations.
For founders, this is a reminder: policy design and city-level experimentation can be as decisive as product features.
2) A revised High Technology Law that tolerates failure
Vietnam’s revised Law on High Technology is being framed as a shift away from “management and licensing” toward “facilitation and partnership.” Crucially, this includes room for controlled experimentation and risk in innovation.
Two details stand out for builders:
It formalizes “strategic technologies” such as AI and semiconductors (more on those below) and ties them to a broad incentive package (investment, tax, land, procurement, talent, and sandbox mechanisms).
It takes effect on July 1 and includes preferential public procurement mechanisms that can, if implemented properly, help address market access for domestically developed tech.
Given the regulatory history of grand visions with limited impact, we would advise a ‘wait and see’ approach, but this law could become a flywheel: more R&D, more local product creation, more reference customers, and eventually (ideally) more defensible Vietnamese IP competing globally.
3) Vietnam’s AI adoption is “fast,” and the talent base is compounding
At the Vietnam Vanguard Summit 2026, executives from the likes of Hitachi and Marvell argued Vietnam is moving quickly on AI, with one noting it can take “just a few months” to build and deploy AI applications for clients.
More concretely, the semiconductor talent narrative is shifting from “not possible” to “already happening.” One executive cited the presence of up to 70 IC design companies and over 10,000 tech employees, including roughly 6,000 in IC design.
Some of those numbers may be disputed, as there is no set way to determine them, but the ecosystem is building a credible bench of engineers across software, hardware, and the systems between them.
4) Viettel’s expensive, potentially symbolic fab
Vietnam has crossed a psychological threshold: breaking ground on its first semiconductor wafer fabrication plant, led by Viettel, in Hanoi’s Hoa Lac Hi-Tech Park.
Viettel aims to pilot 32-nanometer chips by the end of 2027 and then optimize operations through 2028–2030. While such chips would have little use in advanced applications - TSMC, for example, now makes 2-nanometer chips - this is Vietnam stepping into front-end manufacturing, the most capital-intensive, complex stage of the semiconductor value chain.
But why? If Vietnam wants to move up the tech value chain, it can’t just do design and back-end packaging forever. That being said, this will require many years of execution, workforce development, and ecosystem coordination, not to mention many billions of dollars.
The cost of this Viettel fab, meanwhile, has not been announced.
5) Digital asset norms
Vietnam’s Blockchain and Digital Asset Association has launched VIDA, a digital asset investor community aimed at structuring engagement, improving investor knowledge, and contributing policy recommendations as Vietnam’s legal framework evolves.
VIDA is organized around three pillars, namely decentralized finance, real-world asset tokenization, and stablecoins. It also frames education as the best defense against bad behavior and fraud.
For the tech ecosystem, this is a useful signal: even if you’re not building in crypto, the broader question of how Vietnam builds trust frameworks for emerging technologies could increasingly affect capital formation, consumer adoption, and regulations across sectors.
In closing, Vietnam’s 2025 growth story was impressive, and the past few weeks indicate a promising start to 2026. The coming months will undoubtedly be exciting.
See you next month.
The AVV team