Intel opens billion-dollar assembly and test facility in Vietnam

Oct 29, 2010. Ho Chi Minh City. Intel, the world’s biggest chip maker, Intel, opened in Vietnam a billion-dollar assembly and test facility billed as the company’s biggest, as the country vies to move up the technology ladder. The new factory, which has a clean room the size of five-plus football fields, “rises up from former rice paddies like a Walmart on steroids.”

“On behalf of Intel’s 85,000 employees, I would like to say, ‘Hello Vietnam,’ ‘’ company CEO Paul Otellini told an auditorium packed with enthusiastic government officials, employees and other dignitaries during a ceremony that featured a dragon dance and women in ao dais, traditional Vietnamese gowns. The Santa Clara chip giant’s arrival in the Southeast Asian country put it “on the map for high-tech investment and helped the country attract significant investments from several leading global technology firms, including Foxconn and Compal,” he added.

The facility, one of seven worldwide, is projected to employ up to 4,000 people when it reaches full production of the chips used in personal computers. And the state-of-the-art assembly test facility will produce the latest technology microprocessors and chipsets for Intel’s global supply chain. The facility is both the first investment of its kind by the semiconductor industry in Vietnam, and the largest single factory within the Intel assembly test global network.

At full capacity, Vietnam’s first semiconductor factory, which produces chipsets for mobile devices and laptops, will double Intel’s assembly and testing capabilities. The complex has the ability to produce microprocessors in the future.

The massive factory underscores the complex strategic bets Intel makes years ahead of its moves. The process of choosing Vietnam began with secret meetings in Santa Clara between company executives and high-ranking government leaders from Hanoi so as not to trigger protests from anti-communist Vietnamese-American groups in Silicon Valley. Nearly a decade in the making, the 500,000-square-foot factory, twice the size of the company’s next largest plant in Malaysia, had to be built on top of 8,800 stilts that burrow six stories down through unstable sandy soil to reach bedrock.

Intel was the first major foreign high technology investor in Vietnam and the factory, completed in 2010, is the largest computer equipment and manufacturing plant in Vietnam.

The opening of the high-tech facility comes as analysts say communist Vietnam risks losing out both to poorer, lower-wage nations and richer ones that are more innovative and have a higher-quality labour force.

Vietnam’s economy depends too much on exploitation of natural resources and its industry, often dominated by large state-owned groups, lacks dynamism, Vietnam’s Academy of Social Sciences (VASS) and the World Bank said in a joint report in August.

The country is the world’s second-largest exporter of rice and of coffee. Seafood, footwear and garment shipments are other key earners.

“Intel’s investment in Vietnam is undoubtedly a vote of confidence” in the country, said Leon Perera, group managing director of Spire Research and Consulting in Singapore.

The investment proves that Vietnam is benefiting from the need of multinational companies to diversify beyond China, Perera said.

Intel said it was attracted to Vietnam by its skilled, vibrant workforce, as well as the support Intel has received over the past four years from the Vietnam government, the Saigon Hi-tech Park and suppliers. The project was first announced in 2006, and construction began in March, 2007, according to information provided by Intel.

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Intel in Vietnam: A Global Technology Revolution

Intel Opens Billion-Dollar Factory in Vietnam, San Jose Mercury News, Oct 29, 2010