To expand its chip testing and packaging facility in the Vietnam, Intel Corp. is considering significantly increasing its current $1.5 billion investment in the Southeast Asian country, an exclusive Reuters report said.
As businesses try to reduce reliance on China and Taiwan because of 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 the report, will probably be made "over the future years" and may even be more than $1 billion. The second source claimed that Intel was also considering alternative investment opportunities in Singapore and Malaysia, which may be preferable over Vietnam. Since the idea had not yet been made public, sources requested anonymity.
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.
On Wednesday, 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.
One of the sources claimed that 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.
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.
One of the sources said, citing internal discussions, that the American chip giant already has spare acreage where its facility is located, and an expansion in Vietnam would help it better handle supply interruptions caused by relying too much on a single country or a plant.
According to 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.
The executive said that the chip assembling industry presented Vietnam with its greatest possibility to meet industry demands to lessen the "over-concentration" of manufacturing capacity in China and Taiwan, which together account for 60% of the segment's global capacity.
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.
