Unique-Intel weighs increase to funding in Vietnam chip packaging plant -sources By Reuters

By Francesco Guarascio and Khanh Vu

HANOI (Reuters) -Intel Corp is contemplating a major improve in its current $1.5-billion funding in Vietnam to broaden its chip testing and packaging plant within the Southeast Asian nation, two sources acquainted with the matter informed Reuters.

The potential transfer, which one supply mentioned may very well be price about $1 billion, would sign a rising function for Vietnam within the international provide chain for semiconductors, as corporations push to chop reliance on China and Taiwan due to political dangers and commerce rigidity with america.

One of many sources mentioned the funding was prone to be made “over the longer term years” and may very well be even larger than $1 billion, whereas the second individual mentioned Intel (NASDAQ:) was additionally weighing various funding in Singapore and Malaysia, which can be most well-liked to Vietnam.

Each sources sought anonymity because the plan was not but public.

Requested concerning the potential funding plan, Intel informed Reuters, “Vietnam is a crucial a part of our international manufacturing community, however now we have not introduced any new investments.”

Officers of Vietnam’s funding and planning ministry and the provincial authorities of Ho Chi Minh Metropolis, the place Intel has an current plant, weren’t instantly obtainable for a remark.

A press release on the Vietnam authorities’s official portal was amended on Wednesday to take away a reference to an effort by Ho Chi Minh Metropolis to draw $3.3 billion in extra funding from Intel.

The chip packaging and testing manufacturing unit in Vietnam’s southern business hub is Intel’s largest worldwide. The corporate is estimated to have invested about $1.5 billion in it thus far.

The U.S. chip big already has further land the place its plant relies and an growth in Vietnam would assist it higher handle provide disruptions stemming from relying closely on a single nation or a plant, one of many sources informed Reuters, citing inner talks.

One of many sources mentioned Intel was pondering the Vietnam funding whereas ensuring an extra growth overseas wouldn’t be seen as a hostile transfer by Washington, which is pushing to spice up manufacturing of chips at residence.

AGGRESSIVE PUSH

Vietnam is aggressively pushing to broaden its chipmaking trade, courting overseas corporations in all of the three major segments of assembling, testing and packaging; manufacturing with fabs; and designing, officers mentioned.

A U.S. trade govt informed Reuters the nation had large potential to develop rapidly within the space of chip assembling and designing, whereas he noticed growing chip-manufacturing fabs as a distant chance, except for cheaper-to-build fabs for much less subtle, larger chips which might be nonetheless in excessive demand, reminiscent of those who go into automobiles.

The chief mentioned Vietnam’s largest alternative was within the chip assembling sector to fulfill trade demand to cut back “over-concentration” of manufacturing capability in China and Taiwan, which collectively account for 60% of world capability in that phase.

Designing chips requires much less capital and extra extremely expert staff, and Vietnam was making inroads there too, the manager mentioned, with U.S big Synopsys (NASDAQ:) having operations there and with native corporations increasing quick, together with FPT and state-owned Viettel.

Chips and electronics big Samsung (KS:) opened a analysis facility in Hanoi late final yr and has a semiconductors packaging plant within the nation.

Following a worldwide scarcity of semiconductors within the wake of the COVID-19 pandemic, Intel introduced a plan in late 2021 to speculate greater than $7 billion to construct a brand new chip packaging and testing manufacturing unit in Malaysia.

That facility is anticipated to start manufacturing in 2024. Intel additionally has testing and packaging amenities in China and america.