As per two persons familiar with the situation, Intel Corp. is thinking about significantly increasing its current $1.5 billion investment in Vietnam to expand its chip testing and packaging facility there.
As businesses try to reduce reliance on China and Taiwan because to political risks and economic conflict with the United States, the potential move, which one source estimated might be worth roughly $1 billion, would signal an increasing position for Vietnam in the global supply chain for semiconductors.
The investment, according to insiders, will probably be made "over the coming years" and could potentially be larger than $1 billion. A second source claimed that Intel was also considering alternative investment opportunities in Singapore and Malaysia, which may be preferable to Vietnam.
Since the idea had not yet been made public, both sources requested anonymity.
Asked about the possible investment plan "Vietnam is an important part of our global manufacturing network, but we have not announced any new investments."
The provincial government of Ho Chi Minh City, where Intel operates a plant, and representatives of Vietnam's investment and planning ministry were not immediately available for comment.
A statement on the official website of the Vietnamese government was changed to omit a mention of Ho Chi Minh City's attempt to entice Intel to invest an additional $3.3 billion there.
The largest manufacturing facility for Intel worldwide is located in the southern commercial region of Vietnam. It is estimated that the corporation has already invested around $1.5 billion in it.
An expansion in Vietnam would help the American chip company better manage supply disruptions caused by relying too heavily on a single country or factory, as it already has spare acreage where its plant is located.
According to sources Intel was considering the Vietnam investment while ensuring that any future international development would not be seen negatively by Washington, which is eager to increase domestic chip output.
As per officials, Vietnam is actively pursuing foreign companies in all three of the major chipmaking industry segments—assembling, testing, and packaging; manufacturing with fabs; and designing.
In contrast, he saw the development of chip manufacturing fabs as a remote possibility, with the exception of cheaper fabs for less complex, larger chips that are still in high demand, such as those used in automobiles. He believed that the country had great potential to grow quickly in the area of chip assembling and designing.
In order to meet industry demands to lessen "over-concentration" of manufacturing capacity in China and Taiwan, which together account for 60% of worldwide capacity in that segment, the executive said that Vietnam's strongest opportunity was in the chip assembling sector.
Based on the CEO, Vietnam was also making strides in the field of chip design, which involves less investment and more highly skilled labour. American multinational Synopsys has facilities there, while local businesses like FPT and state-owned Viettel are developing quickly.
Samsung, a global leader in semiconductors and electronics, recently constructed a research facility in Hanoi and operates a semiconductor packaging business there.
After the COVID-19 pandemic caused a global scarcity of semiconductors, Intel announced a proposal to invest more than $7 billion to establish a new chip packaging and testing factory in Malaysia in late 2021.
In 2024, that facility is anticipated to start producing. In addition, Intel maintains testing and packaging facilities in both China and the US.
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