Intel may increase investment in Vietnamese chip factory
2023.02.10 01:57
Intel may increase investment in Vietnamese chip factory
By Kristina Sobol
Budrigannews.com – In order to expand its chip testing and packaging plant in the Southeast Asian nation, Intel Corp. is contemplating a significant increase in its existing $1.5 billion investment in Vietnam.
According to one source, the move, which could be worth about $1 billion, would indicate that Vietnam would play a bigger role in the global supply chain for semiconductors. Companies are trying to cut back on their reliance on China and Taiwan because of political risks and trade tensions with the US.
The second person mentioned Intel (NASDAQ:), while the first stated that the investment was likely to be made “over the future years” and could be even larger than $1 billion. was also looking at alternative investment opportunities in Singapore and Malaysia, which might be better than Vietnam.
Since the plan had not yet been made public, both sources requested anonymity.
“Vietnam is an important part of our global manufacturing network, but we have not announced any new investments,” Intel told Reuters when asked about the potential investment strategy.
The provincial government of Ho Chi Minh City, where Intel has an existing plant, and the investment and planning ministry of Vietnam were unable to immediately be reached for comment.
On Wednesday, a statement on the official portal of the Vietnam government was changed to remove a reference to Ho Chi Minh City’s attempt to attract $3.3 billion in additional Intel investment.
Intel’s largest factory in the world is for chip packaging and testing in the southern commercial hub of Vietnam. It is estimated that the company has invested approximately $1.5 billion in it thus far.
One of the sources, citing internal discussions, told Reuters that the U.S. chip giant would be able to better manage supply disruptions caused by heavily relying on a single country or plant if it expanded in Vietnam. The location of its plant already has additional land.
According to one of the sources, Intel was considering making an investment in Vietnam while ensuring that any further expansion abroad would not be viewed as hostile by Washington, which is attempting to increase chip production domestically.
Assembling, testing, and packaging are the three main areas in which foreign companies are looking to expand their operations in Vietnam’s chipmaking industry. fabricating using fabs; and design, according to officials.
According to Reuters, a U.S. industry executive said that the country had a lot of potential for rapid growth in the design and assembly of chips. However, he saw the development of chip-manufacturing fabs as a remote possibility, with the exception of cheaper fabs for smaller, less sophisticated chips that are still in high demand, like those used in automobiles.
According to the executive, Vietnam’s biggest opportunity was in the chip assembling sector, where the industry wanted to reduce China and Taiwan’s “over-concentration” of production capacity, which together account for 60% of global capacity in that sector.
The executive stated that Vietnam was also making inroads in this market with U.S. giant Synopsys (NASDAQ:) because chip design requires less capital and more highly skilled workers. having operations there as well as fast-growing local businesses like FPT and state-owned Viettel.
Samsung, a global leader in electronics and chips (KS:) has a semiconductor packaging plant in the country and opened a research facility in Hanoi at the end of last year.
Intel plans to invest more than $7 billion in the construction of a brand-new chip packaging and testing factory in Malaysia at the end of 2021 in response to the global shortage of semiconductors brought on by the COVID-19 pandemic.
Production at that facility is anticipated to begin in 2024. Additionally, Intel has facilities for testing and packaging in China and the United States.
