© Reuters. FILE PHOTO: The Intel Corp logo is displayed in a store in Manhattan, New York City, U.S., November 24, 2021. REUTERS/Andrew Kelly/File Photo
By Francesco Guarascio and Khanh Vu
HANOI (Reuters) – Intel Corporation (NASDAQ:) is considering significantly increasing its current $1.5 billion investment in Vietnam to expand its packaging and chip testing plant in the Southeast Asian country, two sources familiar with the matter said. the subject told Reuters.
The possible move, which one source said could be worth around $1 billion, will signal Vietnam’s growing role in the global supply chain for semiconductors, as companies work to cut back. dependence on China and Taiwan because of political risks and trade tensions with the United States.
One of the sources said the investment is likely to be made “in the coming years” and possibly even larger than $1 billion, while a second source said Intel is also considering investing instead. replace Singapore and Malaysia, which may be preferred over Vietnam.
Both sources requested anonymity because the plans have yet to be made public.
When asked about possible investment plans, Intel told Reuters, “Vietnam is an important part of our global manufacturing network, but we haven’t announced any new investments yet.”
A statement on the official Vietnamese government portal was revised on Wednesday to remove a reference to the southern mall’s effort to attract an additional 3.3 billion dollars. USD investment from Intel.
Intel’s chip testing and packaging plant in Ho Chi Minh City is Intel’s largest factory in the world. It is estimated to have invested around $1.5 billion so far.
The US chip giant has gained more land to set up a factory, and the expansion in Vietnam will help it better manage supply disruptions due to its heavy reliance on one country or one factory, one of the main sources of supply. news told Reuters, citing internal negotiations.
One of the sources said Intel is considering investing in Vietnam while ensuring that further expansion abroad will not be seen as a hostile move by Washington, which is boosting chip production in the country. water.
POSITIVE PUSH
Vietnam is actively promoting the expansion of the chip manufacturing industry, attracting foreign companies in all three main segments: assembly, testing and packaging; produce with fabs; and design, officials said.
A US industry executive told Reuters the country has great potential for rapid growth in chip design and assembly, while he sees the development of chip factories as a challenge. a distant possibility, except for cheaper fabrication factories for less complex things. Larger chips are still in high demand, such as those for cars.
The CEO said Vietnam’s biggest opportunity is in chip assembly to meet industry demand to reduce “over-concentration” of production capacity in China and Taiwan, which together account for 60 % of global capacity in that segment.
Chip design requires less capital and more skilled workers, the CEO said, and Vietnam is also making inroads there, with US giant Synopsys (NASDAQ:) in the works. there and with rapidly expanding local companies, including state-owned FPT and Viettel.
Chip and electronics giant Samsung (KS:) opened a research facility in Hanoi late last year and has a semiconductor packaging plant in Vietnam.
Following a global semiconductor shortage due to the COVID-19 pandemic, Intel announced plans by the end of 2021 to invest more than $7 billion to build a new chip packaging and testing plant in Malaysia.
That facility is expected to begin production in 2024. Intel also has testing and packaging facilities in China and the United States.
