Intel announces first chip plant project in Vietnam
HO CHI MINH CITY - Intel Corp., the world’s largest chipmaker, yesterday announced a project to build Vietnam’s first chip assembly and testing plant worth US$300 million in HCMC, a move seen boosting the country’s effort to raise its high tech profile.
Intel chairman Craig Barrett said work on the facility, which will assemble, test and ship microprocessors used in PCs and other electronic devices, would begin immediately in Saigon Hi-Tech Park (SHTP) in outlying District 9.
The 20,000-square meter plant, which will initially employ 1,200 people, mostly local talent, will come on stream in the second half of next year, he said at a ceremony where the Ministry of Planning and Investment handed over the investment license.
Intel’s investment in HCMC, the country’s southern commercial hub, is the largest so far by a U.S. company in Vietnam, providing a guarantee for Vietnam to attract other foreign investors.
Local media reported Intel got approval for a US$605 million investment and Barrett said the US$300-million investment announced yesterday was just the first phase of his company’s commitment.
He said. “If we continue as we anticipate, we have the option to go up to US$605 million.”
Deputy Prime Minister Nguyen Tan Dung, speaking at the ceremony at the Reunification Palace in the city center, described Intel’s investment as a right decision as the country had “a young population, a highly literate population, high economic growth – 7.5% to 8% a year, and socio-political stability.”
Another important point is that Vietnam wants to become a modern country with information and communication technology (ICT) given a top priority, said Dung.
It was the deputy prime minister who led a delegation to California in 2001 to call for Intel to invest in Vietnam and Intel’s investment plan then underwent many discussions before the licensing.
“We will try our best to create the most favorable conditions possible so that projects like Intel will be successful,” Dung said.
Barrett also said the reasons to invest in Vietnam were evident to all of those who look around – “a very vibrant population, a very young population, an increasingly strengthened education system.”
Vietnam has a population of around 83 million, two-thirds of them aged less than 30.
The forthcoming facility will be the Santa Clara, California-based company’s seventh such site in the world. Intel’s similar facilities are in China, Malaysia, the Philippines and Costa Rica.
Intel plants often attract other industry players, both suppliers and independent operations, Barrett said. “This will probably lead not just to other investments by Intel but other investments in the high-tech electronic community here in Vietnam.
”We are looking forward to continued investments beyond this,” Barrett said. “We consider this to be one small step in a long journey of involvement with Vietnam.”
Barrett said the plant’s output would serve Intel’s international markets. “Its output will serve the world marketplace, not just the Southeast Asian marketplace, not just the Vietnamese marketplace.”
Assembly and test sites separate chips that come as part of wafers from fabrication plants, then package them into electronic devices, test and ship them.
Speaking to the Daily on the sidelines of the ceremony, U.S.-invested firms in Vietnam showed optimism, saying Intel’s move would put an international spotlight on the country as a destination for investment.
“Intel’s investment here guarantees that Vietnam can now meet the high requirements of the ICT industry and is a place worth investing in,” said Ngo Hung Phuong, managing director of Paragon Solutions Vietnam, the biggest U.S.-invested software firm in Vietnam.
Pyramid Software Development president and CEO Nguyen Thinh said this was a vote of confidence for U.S. companies wishing to do business abroad.
By Tuyet An & Huu Chuong - The Saigon Times Daily - March 1st, 2006.
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