~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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[Year 2002]

Two new faces

Two Japanese IT companies have joined a US$9.38 million chip making plant in the Tan Thuan Export Processing Zone (EPZ) in HCM City. The plant is called Mtex Vietnam under the name of its so-called parent company, Mtex Matsumura, which has taken a big stake of 83.3%. The other partner, Shinjio Elemecs, holds 16.7%. The plant has officially been in operation since July, a source from the Tan Thuan EPZ said. The source also said that it is just the first phase of the overall plan that will allow Mtex Vietnam Company (MVC) to manufacture about 40 million semiconductor ICs per month by 2004.

The plant is located on an area of 9,186 square meters. "We make various kinds of chips for PCs, micro-processor equipment and electronic games," Eguchi Masaharu, general director cum board chairman of Mtex Vietnam, remarked. He also said the Mtex Vietnam factory can manufacture automotive chips to meet the increasing demand of automobile assembly lines in Vietnam. According to him, Mtex Vietnam will raise its capacity to 15 million ICs per month by next year compared with an initial volume of 3 million ICs a month this year. "We believe that, with our hi-tech equipment imported from Japan, Mtex Vietnam will attain a maximum capacity of 40 million ICs per month by 2004," Masaharu added. Actually, nearly 90% of Mtex Vietnam's products are exported to Japan and Thailand.

There are 330 well-trained Vietnamese employees who work together with nine Japanese engineers and technicians. "Our local staff will be 400 by 2004," Masaharu proclaimed. "I think our local staff, especially the engineers, are skillful and hard-working enough to run such a hi-tech factory. They are very capable of meeting our demands." Yarimizu, CEO of Mtex Matsumura Japan, said, "We received very strong support from the Vietnamese Government as well as from one of Japan's largest semi conductor makers, Hitachi Corporation. That is why we believe in our future success in Vietnam. We will make it a firm production base in Southeast Asia."

Mtex entered Vietnam in 1996 and started making automobile components for export to Japan two years later. Last year, it became a supplier of Nissan and Toyota. Meanwhile, another chip factory of the Saigon Investment Group is ready to start this month as planned. Saigon Investment Group Limited (SIG), a U.S.-based totally foreign-owned company, received a license to manufacture semiconductor wafers in My Tho Industrial Zone, Tien Giang Province, 70km southwest of HCM City.

"We invested a total amount of US$30 million to build a factory capable of manufacturing 120,000 wafers per year or 10,000 wafers a month, using a 24-hour working schedule," SIG President and CEO Gene Schecher told the press in HCM City. "However, during the first year, the factory will be able to produce between 2,000-3,000 wafers a month only," he revealed. The estimated selling price per wafer is US$500.

"I think the project will help attract other related industries with an ultimate objective of creating a high technology electronic industry infrastructure in Vietnam. In short, we can bring other companies with our project," Gene Schecher said. He also said it is a good time to invest. The bilateral trade agreement (BTA), which has been passed by both governments of the U.S. and Vietnam, created good conditions for SIG to set up its wafer factory in Vietnam. "Our products will enjoy very low tariffs on exports to the U.S. due to the BTA," Gene Schecher said. SIG's products would focus on a niche market -specific subject oriented application products. It requires a smaller investment and shorter time to build, has remarkable profits and requires a more suitable small-scale level of infrastructure. "Our My Tho factory manufactures analog circuits. We are able to use facilities and equipment that are much lower in cost yet of older technology," Gene observed.

The wafer factory employs 100 workers, 20-25 of them are electronic engineers. SIG sent eight Vietnamese engineers to the U.S. for training. Nguyen Xuan Chuan, Deputy Minister of Industry of Vietnam, said those who invest in the chip industry would enjoy a tax-exempted three year priority. Regardless of its slow start, industrial analysts observed, Vietnam's IT industry will develop to become a production base for Southeast Asia due to two main reasons: cheap labor and stable security.

By Khac Binh - The Saigon Times Weekly - August 24, 2002.