Intel to treble Vietnam investment to $1 bln
HANOI - Intel Corp., the world's largest chip maker, is to more than treble its investment in building two plants in Vietnam to $1 billion, sources familiar with the firm's plan said on Wednesday.
"The license for the increased investment to $1 billion will be handed to Intel on Friday," said a source close to the management board of Saigon High-Tech Park, where Intel's Vietnam unit is building its first plant.
When licensed in February for an initial investment of $300 million, Intel's project to package and test microchips that power personal computers and mobile phones was the biggest investment in Vietnam by a U.S. company.
Vietnam, which has one of the world's fastest-growing economies after China, became the newest member of the
World Trade Organization on Tuesday and many economic analysts expect investment to increase.
Next week, the Communist-run country's thriving economy will be on show when Hanoi hosts the Asia-Pacific Economic Cooperation leaders' week, with hundreds of company executives attending.
A second source familiar with the deal said that initially, California-based Intel had an option to build a second phase for its plant that would double the investment to $605 million.
"But now it wanted to bring the investment up to $1 billion in the second phase," said the source, who declined to be identified due to a lack of authorization to give details.
Intel Products Vietnam said in an invitation received by Reuters that Intel Deputy Chairman Brian Krzanich would announce the new investment level at a ceremony in Ho Chi Minh City, Vietnam's commercial center, on Friday.
In February, Intel Chairman Craig Barret said production at the Vietnam plant, its seventh in the world, would start in the second half of 2007.
Rising interest
Industry officials say the Intel project would help Vietnam draw foreign investors, including those in related businesses.
"The attraction of U.S. group Intel to invest in the high-tech park," the park's board said in a statement, "immediately created an attractive force to many companies and partners to survey on investment opportunity at the park."
Vietnam's technology sector is relatively small, but the country has become the world's top producer of robusta coffee and black pepper, the second-largest rice exporter and Southeast Asia's third-biggest crude oil producer.
The
International Monetary Fund said in its annual review of Vietnam's economy published on Tuesday that WTO membership would create opportunities for expanding non-oil exports and foreign direct investment, a big driver of the economy.
This year, pledges are expected to rise 19 percent from 2005 to $6.6 billion despite graft and lack of transparency in auditing and information.
By Ho Binh Minh - Reuters - November 8, 2006.
Intel gets OK to hike Vietnam investment
HANOI - Intel Corp., the world's largest chipmaker, has received permission to increase its initial investment in Vietnam from $300 million to up to $1 billion, a Vietnamese official said Tuesday.
Intel is constructing a $300 million chip assembly and testing plant in Ho Chi Minh City. Its original license, granted in February, allowed the company to invest up to $605 million.
The government has since approved an amended license allowing Intel to invest up to $1 billion and increase its production capacity, said Nguyen Anh Tuan, director of the Information Technology Industry at the Ministry of Telematics.
The deal is considered a significant step forward in Vietnam's campaign to attract foreign investors. It is already the largest single U.S. investment in the country since the Vietnam War ended in 1975.
Intel has scheduled an announcement for Friday in Ho Chi Minh City, but would not disclose its specific plans.
Tuesday's development came on the same day that the
World Trade Organization formally invited Vietnam to become the Geneva-based commerce body's 150th member. It also comes just days before Vietnam hosts the Asia-Pacific Economic Cooperation summit, which will draw heads of state and business executives from around the globe.
Construction of the plant, which will employ 1,200 people, is expected to be finished in 2007. It will be Vietnam's first semiconductor facility, and Intel's sixth testing facility in Asia.
In 2005, computer and electronic equipment exports from Vietnam rose 34 percent to $1.44 billion, while imports of computers and electronics rose 26.3 percent to $1.7 billion.
Dean McCarron, an industry analyst at Mercury Research, said Santa Clara, Calif.-based Intel would likely spend the extra capital on upgrading the current facility, but could also earmark it for land acquisitions or infrastructure improvements in the surrounding area.
Few other semiconductor companies have the resources to invest as heavily as Intel in foreign markets, McCarron said.
"It shows that Intel has a pretty dedicated level of investment going on, even in the midst of their cost-cutting measures," McCarron said. "They're still willing to invest in their future, and that's something that's pretty much a trademark of Intel."
The company, based in Santa Clara, Calif., has slashed headcount and cut costs to cope with slumping profits and market share losses to archrival Advanced Micro Devices Inc.
Intel announced a massive restructuring earlier this year that called for the elimination of 10,500 jobs — about 10 percent of its work force — through layoffs, attrition and the sale of underperforming business groups.
By Tran Van Minh & Jordan Robertson - The Associated Press - November 7, 2006.
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