Last updated on July 6th, 2025 at 08:25 pm
Over the past decade, Vietnam has emerged as a rising star in global manufacturing. Fueled by rising labor costs in China, favorable trade policies, and a young, tech-savvy workforce, the country has attracted major players in electronics, textiles, furniture, and automotive components. But as the world moves deeper into the Fourth Industrial Revolution, a new force is driving Vietnam’s next leap forward: artificial intelligence (AI).
From predictive maintenance to automated quality control, AI is increasingly being integrated into Vietnamese factories, making production smarter, more efficient, and more resilient. With the right investments in data, talent, and infrastructure, Vietnam is positioning itself not just as a low-cost alternative, but as a regional hub for advanced manufacturing.
Why Vietnam? The Macro View
Vietnam’s appeal to manufacturers stems from a combination of strategic geography, political stability, and low operational costs. As global companies seek to diversify supply chains away from China, a trend accelerated by the U.S.-China trade war and pandemic-related disruptions, Vietnam has rapidly expanded its role in the global value chain.
Companies like Samsung, Foxconn, Intel, and Nike already operate major production facilities in the country. The government has leaned in, promoting pro-business policies and offering incentives for foreign direct investment. But cheap labor alone won’t sustain growth in an increasingly automated world.
AI’s Growing Footprint in Vietnamese Manufacturing
AI in manufacturing typically spans four key areas:
- Predictive Maintenance: Sensors embedded in machines collect real-time data, allowing AI models to predict equipment failures before they happen. This reduces costly downtime, a major issue for labor-intensive sectors like garment production or electronics assembly.
- Computer Vision for Quality Control: AI-powered cameras can inspect products faster and more accurately than the human eye. In Vietnamese factories producing microchips, circuit boards, or smartphone parts, this leads to higher precision and fewer defects.
- Supply Chain Optimization: AI algorithms analyze everything from raw material availability to shipping logistics. Vietnamese exporters can better forecast demand, manage inventory, and avoid the bottlenecks that plagued global supply chains during COVID-19.
- Robotics and Automation: Although Vietnam still relies heavily on manual labor, low-cost collaborative robots (cobots) are beginning to appear in facilities where repetitive or dangerous tasks are common. AI enables these machines to work safely alongside humans and adapt to variable production lines.
Leading the Charge: Case Studies
Several Vietnamese companies and foreign-invested manufacturers are already piloting or deploying AI on the shop floor:
- VinFast, Vietnam’s ambitious electric vehicle startup, uses AI in quality testing and battery diagnostics. The company’s state-of-the-art Hai Phong facility is one of the most automated in Southeast Asia.
- Samsung Vietnam, which accounts for a large chunk of the country’s exports, has implemented AI to monitor yield and flag defects in real-time during semiconductor production. This not only boosts efficiency but improves traceability.
- TNG Investment and Trading JSC, a major garment exporter, partnered with a Korean AI firm to implement smart production planning and energy usage optimization in its textile mills.
These early adopters suggest a growing appetite for AI solutions, but they’re still the exception, not the rule.
Barriers to Widespread Adoption
Despite the promise, Vietnam’s broader manufacturing sector faces several hurdles in fully embracing AI:
- Data Deficiency: AI thrives on data. But many Vietnamese factories, especially in traditional industries like apparel or furniture, are still paper-based or use outdated software. Without digitization, AI adoption is a non-starter.
- Talent Gap: While Vietnam has a growing pool of tech graduates, AI expertise remains limited. Manufacturers often rely on foreign consultants or joint ventures to develop custom AI solutions, which raises costs and complexity.
- SME Fragmentation: The majority of Vietnamese manufacturers are small and medium-sized enterprises (SMEs) with limited budgets and risk tolerance. For them, AI still feels like very remote.
- Infrastructure Challenges: Stable internet connectivity, reliable power supply, and access to cloud computing are still unevenly distributed across Vietnam’s industrial zones.
These gaps mean that for now, AI is mostly being adopted by larger players with deep pockets or state backing. But the trend lines are shifting.
Government Policy & Public-Private Partnerships
Vietnam’s government recognizes the potential of AI and is pushing hard to create an enabling environment. In 2021, it launched a National Strategy on AI until 2030, aiming to make Vietnam one of the top 4 AI hubs in ASEAN. Key goals include:
- Developing 10 major AI innovation centers
- Training 50,000 AI engineers and data scientists
- Attracting global tech firms to invest in AI R&D
The government is also investing in “smart industrial parks” and 5G infrastructure to support advanced manufacturing.
Public-private partnerships will be essential. Programs like AI4VN (Artificial Intelligence for Vietnam), launched with support from the Ministry of Science and Technology, are helping bridge the gap between academia, startups, and industry.
The Road Ahead: Toward Human + Machine Collaboration
The long-term vision for Vietnamese manufacturing isn’t a factory full of robots. It’s human-machine collaboration. AI should be seen not as a replacement for workers, but as a tool to augment their capabilities.
Imagine a garment worker assisted by a computer vision system that flags sewing defects in real time. Or a machine operator whose smartwatch alerts them to overheating bearings before a breakdown occurs. These kinds of scenarios are already being piloted: and could become mainstream as costs fall and digital literacy rises.
Vietnam is uniquely positioned to benefit from this shift. Its young workforce is digitally inclined, and its industrial base is still in a formative stage, meaning factories can leapfrog legacy systems and build smart from the ground up.
AI as a Competitive Edge in Vietnam
As global competition intensifies and sustainability becomes non-negotiable, Vietnamese manufacturers must do more than offer low prices. AI offers a strategic advantage, making factories more agile, predictive, and quality-driven.
For this to happen at scale, key players (government, industry, and academi) must collaborate to tackle infrastructure gaps, upskill the workforce, and make AI tools accessible to SMEs. Done right, Vietnam could emerge not just as the world’s factory, but as a smart manufacturing powerhouse for the AI age.
