Analysis of Hydrogen Consumption in the Semiconductor Industry: Taiwan and Vietnam's Potential

Annie Nguyen, VAHC Secretariat 
Date: August 15, 2026

1. The Role of Hydrogen in Semiconductor Manufacturing

Hydrogen plays an essential role in semiconductor production processes, with several critical applications:

• Surface Cleaning and Oxide Reduction: Hydrogen is used to remove metal oxide layers from wafer surfaces before thin film deposition, ensuring purity for semiconductor layers.

• EUV Lithography: In extreme ultraviolet (EUV) lithography systems, hydrogen is used to clean and protect reflective mirrors, maintaining light source stability and longevity. Each EUV machine consumes over 400 liters of hydrogen per minute.

• CVD and MOCVD Processes: Hydrogen serves as a carrier gas and participates in chemical reactions to deposit thin films in chemical vapor deposition processes.

• Waste Gas Treatment: Hydrogen is used in exhaust gas treatment systems to remove hazardous substances generated during production.

2. Taiwan's Semiconductor Industry: Scale and Hydrogen Consumption

Taiwan is the world's leading semiconductor manufacturing hub. In 2024, the semiconductor industry contributed approximately 18-20% of Taiwan's GDP and accounted for 35% of total export value . Taiwan holds 75% of the global foundry market and dominates the advanced segment with a 92% market share.

Current Hydrogen Consumption:

• Taiwan's semiconductor industry requires ultra-pure hydrogen at 5N5 purity (99.9995%).

• The Taiwan Semiconductor Industry Association (TSIA) has formally identified hydrogen as a critical material requiring strategic supply security, noting that geopolitical tensions in the Middle East have indirectly affected hydrogen supply chains.

• A single integrated hydrogen production and refueling station project in Taiwan supplies hydrogen meeting 80% of demand for 12-inch wafer fabs.

Supply Growth:

• Formosa Chemicals & Fibre produces approximately 50,000 tons of hydrogen annually as a petrochemical byproduct and is investing to refine 2,000 tons into semiconductor-grade hydrogen with a carbon footprint 1/20 of conventional grey hydrogen.

• Grand Pacific Petrochemical has raised NT$5 billion (US$155 million) to build a high-purity hydrogen production line, expected to begin operations in 2028.

3. Pure Hydrogen Suppliers for Taiwan's Semiconductor Industry

Taiwan's hydrogen supply market features major industrial gas companies and domestic manufacturers transitioning from petrochemicals:

4. Taiwan's Semiconductor Cooperation with ASEAN Countries

Taiwan is actively expanding semiconductor cooperation with ASEAN nations, aligned with its New Southbound Policy and the third wave of investment since 2023:

• Malaysia: The Selangor State Assembly is actively developing an IC design park and has reached out to Taiwan Semiconductor and Taiwanese "hidden champion" companies to establish a production base for Taiwan's ASEAN presence . Penang, known as the "Silicon Valley of the East," offers strong economic complementarity with Taiwan's semiconductor industry.

• Singapore: A center for advanced manufacturing with strong Taiwanese presence in the semiconductor supply chain .

• Vietnam: Taiwan is strengthening cooperation through talent training programs, such as the "1+1" master's program collaboration between National Yang Ming Chiao Tung University and Hanoi National University . Vietnam has also attracted major semiconductor projects from Samsung ($1.8 billion) and Amkor ($1.6 billion) for assembly and testing.

ASEAN collectively accounts for close to 20% of Taiwan's exports, making it one of Taiwan's largest markets.

5. Vietnam's Potential for Hydrogen Consumption in Semiconductor Manufacturing

Vietnam's potential for pure hydrogen consumption can be analyzed across three strategic pillars:

5.1 Government Vision and Strategic Technology List

Vietnam has identified semiconductor chips and green hydrogen as part of its 10 strategic technology groups under Decision No. 21/2026/QD-TTg :

• Semiconductor chips and AI are prioritized strategic technologies.

• Green hydrogen technology is listed as a strategic technology product.

• This creates an integrated vision: developing clean energy (green hydrogen) to serve high-tech industries (semiconductors), potentially creating a sustainable ecosystem where domestically produced green hydrogen meets semiconductor industry demand.

5.2 Semiconductor Ecosystem Development in Vietnam

• Talent Development: Vietnam targets building 7-10 specialized technical research organizations and 5 basic research hubs by 2030 . Over 118,000 students are enrolled in 62 semiconductor training programs.

• Infrastructure: Plans for 4 national-level semiconductor labs and 19 local labs by 2027.

• Foreign Investment: Major projects from Samsung and Amkor in Bac Ninh demonstrate Vietnam's rising position in the global supply chain.

5.3 Hydrogen Supply for Semiconductor Applications

• On-site Generation Potential: IONZERA, a membrane supplier, notes that Vietnam's growing industrial sector and renewable energy targets under Power Development Plan VIII (PDP8) create an emerging market for green hydrogen. On-site alkaline electrolysis with advanced membranes can replace cylinder logistics for fabs requiring continuous ultra-pure hydrogen supply.

• Strategic Alignment: Both semiconductor and green hydrogen technologies being prioritized by the government suggests Vietnam is positioning itself to develop an integrated, resilient industrial ecosystem where high-tech manufacturing is supported by domestic clean energy production.

6. Conclusion

Taiwan represents a massive and growing market for pure hydrogen consumption in semiconductor manufacturing, with leading suppliers investing heavily to meet expanding demand. Taiwan is simultaneously strengthening semiconductor cooperation with ASEAN nations, including Malaysia, Singapore, and Vietnam.

Vietnam, with its strategic government policy (10 strategic technology groups including both semiconductors and green hydrogen), growing semiconductor ecosystem, and increasing foreign investment, holds significant potential to become a hydrogen consumer for semiconductor applications. Demand for pure hydrogen will grow in parallel with Vietnam's semiconductor industry development and the realization of green hydrogen production targets. The domestic production of green hydrogen to serve semiconductor fabs could create a sustainable, self-reinforcing ecosystem for high-tech manufacturing in Vietnam.

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