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2024년 09월 19일Vietnam's No. 1 IT company FPT
FPT rushes to develop semiconductors
Vietnam FPT Group is a leading IT company in Vietnam, with branches in 30 countries including the US, Japan, Singapore, Korea, and Europe, and is expected to achieve overseas sales of approximately US$1 billion in 2023. (This is approximately double the growth compared to 2020 before COVID-19.)
FPT Group is known in Korea as a software outsourcing company, but in addition to that, it has the basic infrastructure for digital transformation (DX: Digital Transformation) in Vietnam, such as the cloud (FPT Cloud), data center (FPT FORNIX Data Center), and dedicated Internet lines, and has begun making large-scale investments in AI and big data. This means that FPT's IT core is expected to shed its image as a former overseas software outsourcing factory and focus more on advanced countries and the global market based on generative AI, cloud, and data.
In addition, FPT Group recently started the semiconductor business through its subsidiary FPT IS. This is a strategy to secure technology transfer and original technology through semiconductor outsourcing practice and learning, similar to how FPT innovated IT technology through software outsourcing in the past.
FPT Group has already announced that it will establish a semiconductor subsidiary, FPT Semiconductor, in 2022 to produce semiconductors directly and expects to produce 70 million chips on order by 2025.
At the Korea-Vietnam Semiconductor Cooperation Conference held in Hanoi in August 2024, Tran Dng Hoa of Vietnam FTPIS (a subsidiary of FPT) said that FPT Semiconductor is targeting a niche market in semiconductors and will focus on developing low-power, customer-tailored chips of 100-130 nanometers, which are key to IoT technology.
FPTIS Chairman Tran Dang Hoa
This semiconductor is mainly used for IoT (Internet of Things), and rather than being an in-house technology, it can be seen as an assembly, quality test, customization for customers from existing semiconductors, and outsourcing (OSAT).
FPT Semiconductor using 100~130 nanometer technology (Source: FTP IS website)
FPT has formed partnerships with semiconductor technology companies such as Silvaco and TreSemi in the US to solidify semiconductor-based technologies, and is currently conducting educational curricula for semiconductor undergraduate, graduate, and graduate students in collaboration with practitioners within FPT University starting in 2024.
The core of AI technology is GPU Cloud
If foreign companies, including us, enter Vietnam, the services they will inevitably use are internet and communication services. FPT has its own data centers in major cities for future high value-added IT businesses, and is also preparing a GPU cloud for AI services with Nvidia.
H.100 and FPT Data center on FPT Smart Cloud (Source: VNExpress)
This GPU Cloud can process the parameters of the LLM that FPT is developing on its own, and will become an important core infrastructure for FPT's AI business in the future. It will also play a role in exporting IT infrastructure that can supply nVidia GPUs, which are in short supply worldwide, in Vietnam.
Business symbiosis between FPT and large Korean IT companies
FPT continues its strong partnership with major Korean IT companies.
According to Vietnamese media, FPT Group signed a strategic MOU with LG CNS for digital transformation in March 2024. It is expected that LG CNS's various digital transformation (DX) technologies, such as cloud, AI, big data, smart factory, smart city, and data center, will enter the Vietnamese market through FPT and advance the technology of FPT services.
FPT – LG CNS MOU March 2024 (Source: VNExpress)
SK C&C signed an MOU on Global ESG (Environmental, Social & Government) with FTP IS, a subsidiary of FPT Group, in August 2024. If the agreement with LG CNS is digital transformation (DX: Digital Transformation), the agreement with SK C&C can be seen as green digital transformation (G-DX: Green Digital Transformation).
Under this agreement, SK C&C's carbon neutrality solutions, including carbon management, monitoring integrated platform, and Green Digital Transformation, are expected to collaborate with FPT in designing new factories and implementing Net Zero factory projects in Vietnam.
MOU Agreement between SK C&C Global and FPT IS in August 2024 (Source: VNExpress)
In fact, the reason FPT values SK C&C is because it is a stepping stone to enter the SK Group, and furthermore, it plans to collaborate with SK Hynix and outsource the production of memory semiconductors.
Since this kind of agreement is an MOU to some extent, only the parties involved know how far it is feasible. It is not clear whether a specific business will start this year just because the MOU has been signed, but at least FPT has been providing software development outsourcing to these large companies and their affiliates for a long time.
Vietnam's first unicorn, VNG Group
VNG goes all-in on AI and GPU Cloud
VNG Group, Vietnam's first unicorn, is going all-in on its cloud business based on AI and Nvidia GPUs for its 2024 strategy.
In December 2023, Zalo, a messenger service company under the VNG Group, launched KiLM and began its full-scale LLM (Large Language Model) business.
It can be seen as an integration of the existing VNG Group's affiliates VNG Cloud, TrueID (a financial AI company)'s eKYC, AML (Anti-Money Laundry), and the AI functions of Vietnam's national service Zalo.
VNG Cloud will maintain the existing VNG Cloud service, but will launch the nVidia GPU H.100 service in Thailand, Singapore, and Vietnam under the global brand name GreenNode, thereby launching the first nVidia GPU service in Vietnam. This will supply nVidia GPUs, which are in short supply worldwide, to Southeast Asia, and is expected to increase VNG Cloud's competitiveness in the future AI market.
Nvidia H.100 and VNG GreenNode Data Center Launched by VNG (Ho Chi Minh City)
NLP (Natural Language Processing), which was developed in Zalo's existing messenger, has been developed into its own LLM (Large Language Model) called KilM and will be provided in the form of a Vietnamese Chatbot and various services and APIs owned by the VNG Group.
To attract stable GPU servers to the data center to drive AI, VNG is also promoting the establishment of the VNG-STT Data Center in the SHTP (Saigon Hi-Tech Park) in District 9, Ho Chi Minh City, through a joint venture with STT Global, a Singapore-based specialized data center company.
STT GDC will build the data center through Vietnam's VNG Group. (Source: STTelemedia website)
Recently, VNG Group is preparing to attract investment from the Middle East, and if the Middle East's oil money is invested in VNG, it is expected that it will be able to escape the chronic problem of continuously creating new technologies while only accumulating deficits.
What are the differences and similarities between the two companies?
So far, we have looked at two representative private IT companies in Vietnam. These two companies have many differences in their establishment and growth processes.
While FPT grew in the B2B overseas market based on its solid IT infrastructure and abundant development manpower, VNG Group can be seen as having entered the overseas market after becoming number one in Vietnam with a focus on games and messenger services.
As of 2024, both companies are growing in size through technological collaboration and joint ventures with overseas IT companies, internalizing technology, and developing their own technology. In the future, both companies are expected to compete in both B2B and B2C markets in terms of AI services, from building the nVidia GPU Cloud to generative AI and LLM.
What is the strategy of Vietnamese private enterprises?
Vietnam's major IT companies are good at acquiring advanced IT technologies and reselling them as exports. And the larger the counterparty, the more time, effort, and manpower they invest, and they may form a strategic relationship with one partner, but they do not recognize the competition between partners.
It is a strategy similar to Vietnam's tightrope diplomacy, where they will contact major Korean IT companies here and there and sell their outsourced development services to developed countries with a shortage of manpower, while at the same time helping to develop the Vietnamese IT market.
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📧 기술 문의 : patrick@techvalley.biz | 💬 go2hanoi (카카오톡) @patrickdykim (Telegram)
