Renesas satisfied with chip design results in Vietnam

By Drew Wilson, Contributing Writer -- Electronic Business, 12/19/2006

In line with design trends, Tokyo-based Renesas Technology runs chip design operations at two sites in China and outsources design to India. 

But seldom mentioned in the same breath is Renesas’ Vietnam design site, which the company plans to grow five fold, to 500 employees, by 2009 while raising the level of activity, according to CEO Saturo Ito.

“We started with logic verification work, and that has gone very smoothly,” Ito explains. “Vietnamese engineers learn very quickly.”

Founded in Ho Chi Minh City in 2004, Renesas Design Viet Nam currently has 110 staff members, nearly all of whom are engineers. Activity has increasingly focused on designing SoCs in collaboration with Renesas Japan. A recent tape-out: the SoC that goes into Japanese Pachinko game machines.

Vietnamese engineers are also doing RTL design, synthesis and place-and-route and are training in design-for-test methods, says Cang Tran, vice president of Renesas’ Vietnam operations.

So far the main challenge is workforce-related.

“We can get enough engineers, but they are not trained to the level we require,” Tran says.

And unlike the Chinese, Vietnamese tend to stay put in their own home town. Engineers can’t be lured down from Hanoi in the north, he adds. Therefore, a large part of Renesas’ budget involves training, and the company has established links with universities to better prepare engineering graduates.

Overall, however, having a presence in Vietnam brings advantages. Political and social stability and the diligence of the Vietnamese workforce are highest on the list, Tran says. Vietnam also has little turnover compared to China’s 25 percent annual turnover rate in electronics hotbeds such as Suzhou. Skilled-labor wages are increasing, although still attractive. An engineering graduate typically earns $300 per month, Tran says.

Ito adds that having a Vietnam operation is also seen as a way to spread risk.

“People went into China very aggressively and are starting to feel the need for some kind of risk management,” he says.

Renesas runs the sole chip R&D house in Vietnam, but the logic of global business says that that won’t last long.

The country has seen an uptake in electronics investment in the last 18 months, the centerpiece being Intel assembly-and-test facility—the company’s largest worldwide—with a pledged investment of up to $1 billion.

More investment allure comes from a GDP that has been growing more than 7 percent annually since 2000 and World Trade Organization (WTO) entry, expected in January 2007.

“Globally, Vietnam is becoming an area of focus,” Ito says. “Fortunately, we are the first guys who went in there with R&D activity and were able to establish relationships.”