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Asia Labor Teens across Asia migrate to Taiwan for promises of semiconductor jobs
Labor

Teens across Asia migrate to Taiwan for promises of semiconductor jobs

Student-interns are paid for low-skill factory tasks and spend little time in the classroom.

A stylized illustration of a large, graduation cap with the surface of the cap resembling a semiconductor chip, surrounded by small figures in lab coats who appear to be working on it, with a gradient color scheme and a green background.
Ruwangi Amarasinghe for Rest of World
Ruwangi Amarasinghe for Rest of World
  • Taiwan faces rising labor shortages in semiconductor factories.
  • Some openings are filled by high-school and college students who work as interns, doing basic operations and maintenance.
  • The students need to go back to university to qualify for higher-skilled engineering positions.

Before Dang Nhut Hao came to Taiwan, he knew nothing about semiconductors. 

Growing up in Dong Thap — a southern Vietnamese province on the Mekong Delta famous for its rice fields, red-headed cranes and lakes dotted with lotuses — Dang loved biology, and got into one of Ho Chi Minh City’s most prestigious undergraduate science programs in 2019. But his family couldn’t afford the tuition. At the age of 18, Dang took out a loan of 80,000 New Taiwan dollars ($2,450) and flew to Taipei to join a semiconductor and electro-optical engineering work-study program.

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“Although the cost of living and tuition here are higher than in Vietnam, I could earn money on my own, pay for everything myself, and support myself,” Dang, who has since graduated, told Rest of World.

Dang is among thousands of teenagers from Southeast Asia who have been recruited into work-study programs since 2017, and ended up in factory jobs in Taiwan’s booming semiconductor sector. The tiny island supplies 63% of the world’s semiconductors — chips that power everything from LED bulbs to smartphones, electric cars, and artificial intelligence models. The industry is growing rapidly, with revenue expected to hit $1 trillion by 2030 from $545 billion in 2023, according to a PricewaterhouseCoopers report.

The time spent in school is very, very little — sometimes less than two days a week.

This has created a massive, often unfilled, demand in Taiwan for workers in its semiconductor fabricators, or fabs. There were 26,000 monthly job openings in the latter half of 2024, mostly in lower-level positions such as machine operators and packaging workers, according to Taiwanese recruitment firm 104 Job Bank.

One way to fill this gap has been by recruiting middle- and high-school graduates, largely from Southeast Asia, into Taiwan’s vocational high schools and colleges. Some 35,924 students were recruited into these programs — in all fields including STEM — in the five years to 2022, according to the latest data available from the Ministry of Education and the Overseas Community Affairs Council.

Students in these programs often become a low-paid labor force, working long hours in factories in the guise of “practical training,” according to education experts and a recent report from Control Yuan, a government agency that acts as a watchdog. Some schools intentionally leave gaps in schedules for students to work, blurring the lines between work-study and part-time labor, the report said.

After graduation, students can find it difficult to move from the shop floor to higher-skilled engineering positions without further education, Ping Chou, chairperson of the Taiwan Higher Education Union and a sociology professor at Nanhua University, told Rest of World.

“The time spent in school is very, very little — sometimes less than two days a week, or in some cases, just one day or less,” he said. “What’s the reality? Most of their time is spent working.”

The Association of Private Universities and Colleges, and the Association of National Universities of Science and Technology of Taiwan — which represent vocational institutes — did not respond to a request for comment.

Dang arrived in Taiwan under an industry-academia program, part of a 2016 initiative by then-President Tsai Ing-wen to reduce reliance on China and boost ties with neighbors. 

He enrolled at Minghsin University of Science and Technology, one of Taiwan’s largest technical colleges in the electronics hub of Hsinchu, for a four-year bachelor’s degree. In his first year, he mostly learned Mandarin, he said. In his second year, he and 31 classmates were bussed to Miaoli, a small county south of Hsinchu. At an LED factory owned by Everlight Electronics, Dang was taught to operate five machines that cut and packaged semiconductor chips used in LEDs.

Such internships fill a critical need in the semiconductor industry, where production lines run 24/7 and cannot be shut down, Weber Chung, senior vice president at 104 Job Bank, told Rest of World.

Operators work in shifts to monitor production, calibrate machines, and troubleshoot problems as they arise, he said. When a machine malfunctions, they refer to technical manuals to diagnose and repair the problem. It is precise work because modern chips operate at the nano scale, and even the smallest defect can cause failure, he said.

Dang learned this trade working six days a week and living in a factory dorm. He was paid the then-minimum monthly wage of 23,800 New Taiwan dollars ($724), equal to an entry-level salary for operators, and the money went toward his tuition and student loan, he said. 

He spent his third year back on campus. In his fourth year, he returned to the factory to maintain the machines.

“In university, if we’re talking about truly learning technical or scientific skills, we didn’t really get to learn much due to time constraints,” Dang, now 23, recalled. “Since we were either in class or at work, there wasn’t really time to study properly. Most of the time, classes were brief, just enough to complete assignments, and then we had to go back to work.”

Minghsin University recruits around 2,600 international students each year. More than 60% come through industry-academia collaboration programs, Hsin-Te Liao, vice president of the university, told Rest of World. Most are from Vietnam, the Philippines, and Indonesia, he said.

“We recruit foreign students based on the needs of the companies we work with,” he said. 

Companies mostly request students from Vietnam and the Philippines, according to Liao. After the students graduate, the companies hope to retain them as employees.

Among the companies partnering with vocational schools are ASE Holdings, Powertech Technology, and Siliconware Precision Industries, according to recruitment documents. They are part of the supply chain for big tech firms including Nvidia and Apple.

Dang said some of his classmates remain at Everlight as maintenance workers or forepersons. Others have found jobs as operators in the electronics industry, he said. A few have returned to their home countries. 

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Dang was one of five students who decided to study further.

Everlight did not respond to a request for comment. The Taiwan Semiconductor Industry Association, and the Taiwan IC Industry & Academia Research Alliance — which represent the semiconductor industry — also did not respond. 

The inflow of students into Taiwan is set to increase as the government has announced plans to invest $160 million to attract 320,000 students into STEM, finance, and semiconductor fields by 2030. 

In university, if we’re talking about truly learning technical or scientific skills, we didn’t really get to learn much due to time constraints.

Middle-school graduates, some as young as 15, are recruited through a “3+4 Vocational Education Program.” 

These include Ryan Hartono, who left Medan, Indonesia, when he was 16 as part of the program to attend three years of vocational high school, followed by a bachelor’s degree in electronic engineering at Cheng Shiu University in Kaohsiung. Every three months, Hartono found himself in a fab in southern Taiwan, gripping a digital measuring tool no larger than an iPhone, he told Rest of World.

Hartono’s tasks revolved around the manufacturing lines of Walsin Technology Corporation. The company makes semiconductor passive components that are installed in Intel’s computer processors and AI servers for Microsoft and Google, among others. 

Hartono would measure multilayer ceramic capacitors and chip resistors no bigger than a few centimeters, ensuring they met the exacting standards set by designers and engineers. He also operated the machines that made these components, he said. 

“It is more of a one-sided, simple job,” Hartono, now 25, recalled. 

At college, Hartono worked five days in the same factory with two days of rest — the only time he could study, he said. Most of his classmates graduated to low-skilled jobs as operators in electronics factories and fabs, he said.  

Such work-study programs place students at a disadvantage for engineering jobs, Shangmao Chen, a government-sponsored curriculum reviewer of vocational institutes and a professor at Fo Guang University, told Rest of World.

“Most of their internship work is quite low-level, to be honest. It’s basically operator-level work,” he said. “So, after graduation, I think it’s highly unlikely for these students to have any opportunity to advance to the position of an engineer.”

Both Cheng Shiu and Minghsin universities did not respond to a request for comment about whether their programs blur the lines between internship and labor. 

Most of their internship work is quite low-level. ... It’s basically operator-level work.

After graduation, Hartono was hired as a low-level engineer at Yageo Corporation, a supplier of components of chips used to train AI. He later moved to Taiwan Semiconductor Manufacturing Company (TSMC), where he dons a bunny suit every morning to maintain ion implant machines that give semiconductors their electrical characteristics.  

Other than his usual hours, he also works one weekend a month and a weeklong night shift every two months. Shift work is common in maintenance and operation roles, which are usually filled by vocational school graduates, said Chung from 104 Job Bank. Hartono said he is happy with his job, and isn’t thinking of more advanced research and design roles.

“It hasn’t been long since I joined, and I feel that my role is to first understand my work well, and contribute to the department in some way,” he said. 

Dang aspires to do higher-skilled semiconductor research and has gone back to his alma mater to get a master’s degree. He would like to work in Taiwan for at least three years before potentially returning home to Vietnam.

He does not regret choosing to do the work-study program, he said. It has opened up new opportunities, including joining a master’s program in semiconductor engineering and a part-time research internship.

“I think I am very lucky, I was able to transition into the semiconductor field,” he said.

EV Revolution

Indonesia, home to the world’s largest nickel reserves, struggles to achieve its EV dreams

China’s growing involvement and the rapid shift to lithium batteries dissuade investors.

A silhouette of a person wearing a construction helmet, with a battery icon superimposed on the head, showing a low charge indicated by a red section, set against a gradient green and black background.
Daniel Zender for Rest of World
Daniel Zender for Rest of World
  • Indonesia has set a target to become one of the world leaders in EV battery production by 2027.
  • It opened Southeast Asia’s first EV battery facility last July, a joint venture between Hyundai, LG, and the Indonesia Battery Corporation.
  • Last year, Elon Musk declined Indonesia’s proposal to set up a battery factory in the country due to logistical challenges.

Karawang county, located about 90 minutes by road from Jakarta, has been a major automotive hub in Indonesia for decades, housing factories of companies like Yamaha and Toyota. Last July, the industrial area added another feather to its cap when Southeast Asia’s first electric vehicle battery factory was unveiled there.

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Established as a joint venture between Hyundai Motor, LG Energy, and the state-owned Indonesia Battery Corporation, the factory has the annual capacity to make battery cells sufficient to power 150,000 EVs. The factory marked a key step in Indonesia’s ambition to become a hub of EV manufacturing in the region, and one of the world leaders in EV battery production by 2027.

The country is home to nearly half of the world’s production of nickel, a key mineral in manufacturing batteries. In 2020, Indonesia banned nickel ore export to stimulate domestic battery production and attract global investors to set up operations.

The Indonesian government has been courting different countries, but the U.S. and Europe generally have more strict ESG requirements.

The ambition, however, remains a pipe dream as investors remain skeptical due to challenges like poor compliance with environmental standards and labor rights, Chinese companies’ deep involvement in Indonesia’s nickel industry, low domestic EV demand, and a global technological shift toward batteries that do not require nickel.

In 2024, German chemical company BASF dropped plans for a nickel refinery facility in Indonesia due to concerns over its impact on one of the world’s last Indigenous tribes living in voluntary isolation. The same year, Elon Musk declined Indonesia’s proposal to set up a battery factory in the country due to logistical challenges.

“The Indonesian government has been courting different countries, but regions such as the U.S. and Europe generally have more strict ESG [environmental, social, and governance] requirements, making investment [in Indonesia] slightly difficult,” Tenny Kristiana, a researcher at the International Council on Clean Transportation, told Rest of World.

Over the last decade, China has reportedly poured over $65 billion into Indonesia’s nickel industry. Chinese investors and companies control around 90% of Indonesia’s nickel mines and processing plants. The involvement of Chinese companies has led to a relatively minimal oversight of environmental concerns, Kevin O’Rourke, who analyzes policymaking developments that affect foreign investors at consulting firm Reformasi Information Services, told Rest of World. There has been a series of explosions and accidents reported at Indonesian nickel mines and smelters in recent years, claiming the lives of tens of workers and raising serious safety concerns.

“Chinese investors have strong ties with [the] Indonesian government, so it’s easier for them to obtain permits and access to large projects,” Djoko Widajatno Soewanto, a member of the mining advisory board at the Indonesia Nickel Miners Association, told Rest of World.

A mining site with multiple excavators working on a reddish-brown earthen landscape, surrounded by piles of dirt and a few workers visible.
Muhammad Fadli for Rest of World

Chinese companies’ involvement has also made Indonesia ineligible for U.S. government incentives — such as the now-halted Inflation Reduction Act — which would have allowed it to sell its products at competitive rates in the U.S. The Act offered incentives including grants, loans, and tax cuts to accelerate the adoption of clean vehicles, but these benefits were not extended to vehicles that used batteries from China, Russia, North Korea, and Iran.

“The U.S. is the biggest growth market for EVs, so it makes sense that the [Inflation Reduction Act] had made many producers … nervous,” Putra Adhiguna, managing director at Energy Shift Institute, a think tank focused on energy finance, told Rest of World. Though the Donald Trump administration has halted funding for the Act, “there might be other impositions that we don’t know yet, such as tariffs or other barriers … to incentivize EVs made in America,” Putra said.

Indonesia’s reliance on Chinese-made batteries seems to be only increasing.

The Indonesia Battery Corporation is in talks with China’s Contemporary Amperex Technology to set up a nickel-based battery facility in the country, Bayu Yudhi Hermawan, vice president at Indonesia Battery Corporation, told Rest of World. “Materials that are needed for the EV industry can be found in Indonesia. We have copper, aluminum, tin, even cobalt,” he said.

While there have been reports of Chinese companies trying to reduce their stakes in Indonesian nickel smelters to make the products eligible for U.S. tax credits, experts remain skeptical about this trend. “Chinese firms are not going to surrender 76% of their investment in these projects. That runs directly counter to what the Chinese want and how they operate,” O’Rourke said.

Within Indonesia, EV adoption has remained low, making it an unattractive market for carmakers to set up factories. In 2024, EVs accounted for less than 5% of total car sales in the country.

The Indonesian market is too small … so it doesn’t make sense to justify the expense of the production facility.

“The Indonesian market is too small … so it doesn’t make sense to justify the expense of the production facility,” O’Rourke said. “If [the factory] is to export, it’s much more efficient to do that from China. Their workforce has better skills, especially in terms of math and engineering, and there’s an ecosystem that supports it because it’s a giant economy.”

Globally, battery technology has started slowly shifting toward non-nickel batteries, which could threaten Indonesia.

Over the last five years, lithium iron phosphate batteries — which do not use any nickel — have “moved from a minor share to the rising star of the battery industry, supplying more than 40% of EV demand globally by capacity in 2023, more than double the share recorded in 2020,” said a report by the International Energy Agency, a Paris-based autonomous intergovernmental organization. Lithium iron phosphate batteries offer greater safety and have a longer life cycle at a cheaper price point. Chinese EV makers Wuling Motors and BYD use the batteries in some of their vehicles.

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In 2023, nickel prices crashed by 45% due to an oversupply of the mineral, partly because of the rising popularity of the lithium iron phosphate batteries.

To boost nickel prices, Indonesia is considering deep cuts in mining operations, Bloomberg reported in December 2024. The move may destabilize the country’s mining and processing industry as it “can lead to layoffs,” Djoko said. “We might lose the international market, too, because other countries that halted their production could take over our market.”

Chinese companies and the Indonesian government are reportedly working to improve their ESG compliance, but that might not bring the country enough investments to create a comprehensive EV ecosystem, O’Rourke said.

“There are too many types of minerals and elements that go into the production of batteries. That’s high-value-added technology and intellectual property. It’s something that would be difficult to replicate in Indonesia,” he said.

Labor

Filipino tech workers demand protections in AI bill after Rest of World report

New coalition calls for labor and free speech protections as AI tools make call center work both more efficient and demanding.

A group of individuals holding signs with various slogans related to workers' rights and advocacy for BPO (Business Process Outsourcing) workers. The signs include messages such as "We shall not be muted!" and "BPO workers, unionize now!" In the foreground, a table displays a banner that reads "CODE AI - Coalition of Digital Employees in AI." The image is presented in a high-contrast, halftone style against a blue background.
Rest of World/BPO Industry Employees Network
Rest of World/BPO Industry Employees Network
  • Rest of World described the use of advanced AI tools that made call center jobs more challenging for workers in the Philippines.
  • The companies subsequently launched investigations and fired a worker — actions that a lawyer said infringed on free speech.
  • The Code AI coalition will participate in a labor taskforce informing an AI regulation bill.

Filipino digital workers launched a coalition to lobby for labor and free speech protections in the workplace as artificial intelligence is deployed. The AI tools raise new risks, and the firing of a worker who spoke to Rest of World in November signals an industrywide “code of silence” around the impact of AI on the workplace, the group said.

“We call on the government for a proactive and inclusive policy-making, as workers face threats of job losses, diminishing wages, and other harms,” Lean Porquia, convenor of the coalition, said in a press statement. Porquia is also head of research for the BPO Industry Employees’ Network, an organization focused on the rights of business process outsourcing workers.

The Coalition of Digital Employees – Artificial Intelligence, or Code AI, was prompted by Rest of World reporting that led to investigations and the termination of a worker, Code AI members said at a press briefing in Manila. The report, published in November 2024, described advanced AI tools deployed by Concentrix Corporation and Accenture — including AI co-pilots and sentiment analysis deployed for American Express and Meta, Facebook’s parent company — that made work both more efficient and demanding, according to the workers.

“Someday, AI could just replace us,” former BPO employee Renso Bajala said at the briefing. Bajala chose to share his work experience at Concentrix in the Rest of World article in November, and said he believes he did not violate a nondisclosure agreement. 

But Concentrix, a BPO firm that employs approximately 100,000 people in the Philippines, fired him shortly afterward for noncompliance with its “code of discipline and ethics,” Bajala said. The code states that employees may not mention the client’s name or state opinions on social media. 

Noel Neri, a lawyer at the Pro-Labor Legal Assistance Center in Manila who is not affiliated with Code AI or Bajala, told Rest of World the policy is “unjust and unreasonable.” 

“It tempers freedom of expression and warrants an illegal dismissal complaint [from Bajala],” said Neri, who reviewed Concentrix’s disciplinary code. 

At Accenture, managers are investigating employees on Meta projects, trawling through their social media accounts to find potential “leaks,” according to two employees who requested anonymity to safeguard their jobs.

Concentrix, American Express, Accenture, and Meta did not respond to Rest of World’s requests for comment. 

Code AI has demanded Concentrix reinstate Bajala, and that workers be allowed to freely discuss the impacts of AI on labor. 

There is an industrywide “code of silence” on AI, Porquia told Rest of World. “We can’t say anything bad,” he said. “Because BPOs are prepping for a full-blown AI implementation, they’re trying to hide the exploitation behind it.”

Concentrix’s chief executive officer, Chris Caldwell, told Bloomberg last August that AI will create new roles that existing workers can fill.

The Philippines has 1.84 million BPO workers, and the country leads in AI adoption, with two-thirds of companies already using the technology. Industry estimates suggest that 300,000 BPO jobs could be lost in the next five years, and that 100,00 new roles could be created. 

AI puts pressure on workers to increase productivity, without corresponding increases in wages or benefits, the Code AI coalition said.  

“Our productivity is closely monitored by AI. It adds pressure and stress to drive up our key performance indicators,” Bajala said at the briefing.

Code AI includes representatives from digital sectors including BPO, delivery, telecoms, and information technology. The group will participate in a congressional labor committee technical working group on the Artificial Intelligence Regulation Act, a bill that proposes to regulate the development, application, and use of AI.

Code AI will hold a town hall on February 22 in Manila for digital workers who face AI in the workplace. 

“We aren’t against AI,” Porquia said. “We want technology in the Philippines to evolve. But in doing so, workers need to be protected.”

Innovation

Vietnam’s unlikely innovator: a military-run postal service

From warehouse sorting robots to delivery drones, Viettel Post is pinning its hopes on tech as the salve to an inefficient logistics sector.

Viettel Post
Viettel Post
  • In Vietnam, the fastest-growing e-commerce market in Southeast Asia, logistics companies are struggling to meet demand.
  • Viettel Post, a postal delivery company under Vietnam’s Ministry of National Defence, has built robots to increase warehouse productivity.
  • Viettel Post is eyeing neighboring markets, such as Cambodia and Myanmar, for its robots.

On Christmas Eve in 2024, a warehouse in suburban Hanoi kept pace with the festive season frenzy. Thousands of packages intended for Shopee and TikTok Shop customers were off-loaded, sorted, and dispatched to an unceasing rhythm. On the warehouse floor, however, there were barely any people in sight. Instead, about 200 beetle-shaped robots whirred across the facility, moving concave trays loaded with packages.

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Gliding at two meters per second, the robots passed under a scanner that read the QR codes affixed to the packages and guided them to delivery bags for their respective provinces.

The robots, called automated guided vehicles (AGV), were first unveiled by Viettel Post — a postal and courier service company owned by Vietnam’s Ministry of National Defence — in January 2024.

The machines run on software “designed entirely by Viettel Post,” Bui Quang Trung, the 26-year-old head of operations at the organization’s technology department, told Rest of World. The robots don’t make mistakes, he said. “Only occasionally, there would be a mechanical error,” Trung added, referring to instances in which the robots malfunctioned because of minor problems with their hardware, such as a wheel that was not working properly.

The robots are part of Viettel Post’s efforts to reap the dividends of the online shopping boom in Vietnam, one of the fastest-growing e-commerce markets in Southeast Asia. In the Hanoi warehouse, the introduction of the robots and other warehousing technology has helped Viettel Post shorten delivery times by 8–10 hours, grow output by 3.5 times, and increase processing capacity for the “entire system” to about 4 million parcels a day, which roughly amounts to meeting 50% of Vietnam’s e-commerce capacity, a company spokesperson told Rest of World.

Viettel Post is now eyeing foreign markets, such as Cambodia and Myanmar, for its robots. “AGV technology is modern and popular,” Trung said. “It is the trend of logistics companies now.”

The Vietnamese logistics sector has grown between 14% and 16% to about $40 billion annually in recent years, according to the industry body Vietnam Logistics Business Association. But the fragmented industry is notoriously inefficient. Vietnam ranks 43rd in the World Bank’s logistics performance index, lumbering behind regional peers Singapore, Malaysia, and Thailand. By some estimates, logistics costs currently account for at least 16%–17% of the country’s GDP, almost double the proportion that Singapore spends.

Viettel Post dominates Vietnam’s logistics sector with a market share of about 17%, according to a 2023 report by research firm VietData. But it has to contend with the other state-owned postal enterprise, Vietnam Post, as well as homegrown app Be and foreign private players including J&T Express, Best Express, Shopee’s SPX, and Grab.

“That brings pressure to a lot of logistics companies to think about how they try to capture that market,” Hung Nguyen, who teaches logistics and supply chain management at RMIT University in Hanoi, told Rest of World. For state-owned companies such as Viettel Post, it is also a “political mission,” he said. “How do we integrate [the logistics sector] to compete with international ones like China?”

Unlike China’s centralized logistics infrastructure, consolidation between sellers, e-commerce platforms, and logistics companies in Vietnam remains weak, Nguyen Xuan Hung, head of logistics for e-commerce at the Vietnam Logistics Business Association, told Rest of World.

“Vietnam has too many small-scale sellers, making the sorting center’s job difficult,” he said. Since some vendors outsource packaging and delivery services, while others manage on their own, fulfillment centers without a sizable client base struggle to automate.

Vietnam has too many small-scale sellers, making the sorting center’s job difficult.

To complicate matters further, Vietnamese e-commerce buyers prefer cash on delivery, and delivery workers often have to make multiple trips to locate the recipients. “So logistics companies have one more task, that is payment collection,” said Hung from the logistics association.

In this climate, Viettel Post and Vietnam Post have an inherent advantage: their extensive networks. Their existing scale allows for automation, said Hung from RMIT. In February last year, Vietnam’s deputy minister of information and communications, Phan Tam, directed major postal companies to expand their coverage for e-commerce through tech-focused solutions and shared infrastructure.

Viettel Post has deployed 10 teams, each dedicated to a stage of the logistics chain — such as warehousing, transportation, customs clearance, and last-mile deliveries — to build automated systems that can “optimize the movement of goods,” the company spokesperson told Rest of World.

Viettel Post’s robots were developed by one such team that was set up in 2023. It comprised 11 engineers, some of whom had won domestic and international robotics competitions.

The engineers began their work with a trip to China, where they met peers from leading logistics companies including Alibaba’s Cainiao and Yunda Express, and Libiao, which specializes in logistics automation. They studied the models used by China’s national postal service and e-commerce giant Amazon. Back in Vietnam, the team purchased robots made by Viettel Post’s competitors to understand how they functioned.

The gambit paid off. According to Trung, once the robots arrived, workers no longer had to dash around the warehouse to separate round packages, which tended to fall off fast-moving conveyor belts. Productivity increased significantly, he told Rest of World.

According to a Viettel Post press release, one of its clients, Yody — a Vietnamese fashion retailer that has 300 stores across the country — cut labor costs by half after it purchased 48 AGV robots and warehouse management software.

The flip side to the productivity gains, however, is the “risk of job losses, requirements for new skills, and mental pressure on workers,” Pham Trung Thanh, director of the Institute of Creative and Digital Transformation, which conducts training and consultations on digitalization projects in Vietnam, told Rest of World.

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Over the past year, Viettel Post has tested delivery drones for access to remote areas, cut off by natural disasters. Apart from AGV robots, it has introduced robotic systems with flexible arms to automate warehouse inspection, sorting, and handling of material. Viettel Post has also installed 1,000 smart boxes — multicompartment digital lockers that store packages for unavailable recipients — within buildings in Hanoi and Ho Chi Minh City, the company spokesperson told Rest of World.

In January, Viettel Post introduced its latest robots to its warehouse in Ho Chi Minh City — even the hardware for them was manufactured in-house. “Previously, using imported AGV robots was a popular choice for Vietnamese businesses,” Viettel Post’s spokesperson said. Now, the company is developing its own.

Viettel Post’s self-reliant approach is not necessarily cost- or time-efficient. This is why logistics companies in Vietnam prefer to import available tech, said Hung from the logistics association.

The state-owned enterprise’s focus on research and development is likely motivated by ambitions that surpass the e-commerce market, Hung from RMIT told Rest of World. The “main job” of Viettel Post’s parent company, Viettel, “is still the military,” he said. Logistics automation, according to him, offers an opportunity for tech ownership, and Viettel seeks to lead by example. This is aligned with the state’s aspirations to transition Vietnam from low-cost manufacturing and assembly to high-tech sectors, such as artificial intelligence and semiconductors.

Last December, Viettel Post inaugurated Vietnam’s largest logistics park, built across nearly 144 hectares at the cost of $130 million.

The park will be equipped with a standardized database, directly connected to Vietnam and China customs data, to reduce the time taken for customs clearances for cross-border products to under 24 hours, instead of the current four to five days, the spokesperson said. The company is also establishing a subsidiary in China’s Guangxi province to expand its cross-border logistics system.

Viettel Post believes technology will lay the foundation for a transformation in the national logistics infrastructure, the company spokesperson said. With these initiatives, the company is seeking to “turn Vietnam into a regional logistics hub.”