By Francesco Guarascio
HANOI (Reuters) – Intel has shelved a deliberate funding in Vietnam that might have practically doubled the U.S. chipmaker’s operation there, one particular person briefed on the plans stated, in a blow to the nation’s rising ambitions within the chips trade.
The Southeast Asian electronics manufacturing hub is house to Intel’s largest manufacturing unit worldwide for assembling, packaging and testing chips, and has been banking on the corporate additional increasing there particularly after Joe Biden introduced offers to assist Vietnam’s chips trade throughout a go to in September.
Vietnam is eager to place itself as a substitute for China and Taiwan, amid political dangers and commerce tensions with the US.
However shortly after Biden’s go to, U.S. officers knowledgeable a choose group of U.S. businessmen and specialists that Intel had shelved an growth plan, one of many members within the assembly informed Reuters.
The supply, who declined to be named as a result of the data was confidential, stated Intel had made that call round July.
The corporate didn’t say why it had referred to as off the growth, the particular person stated, however a second supply who attended two separate conferences in latest weeks between U.S. firms and high Vietnamese officers stated Intel had raised considerations in regards to the stability of energy provides and extreme forms.
A type of conferences passed off final week in Hanoi and was attended by Vietnam’s Deputy Prime Minister Tran Luu Quang.
Requested in regards to the plan, Intel declined to remark however informed Reuters: “Vietnam will proceed to be a essential a part of our world manufacturing operations as demand for semiconductors grows.”
The U.S. embassy in Hanoi declined to remark. The Vietnamese authorities didn’t reply to requests for remark.
Intel’s about-turn could be a blow to Vietnam’s rising ambitions to play a bigger function within the world semiconductor trade. It has been holding talks with chipmakers, hoping to lure corporations in search of to diversify their provide chain.
The choice by Intel comes after it introduced massive investments in Europe in June and Vietnam suffered energy shortages in the identical month, forcing many producers to quickly droop manufacturing.
Intel can also be increasing its funding in chip packaging in Malaysia, certainly one of Vietnam’s predominant Southeast Asian rivals.
Throughout Biden’s go to to Hanoi, the White Home unveiled new initiatives and investments by U.S. chips firms together with Amkor, Synopsys and Marvell. Intel was not talked about.
“You can not take without any consideration that as a result of Intel has already invested right here it’ll make investments extra,” Chung Seck, associate at regulation agency Baker & McKenzie Vietnam informed Reuters.
Reuters reported in February that Intel was planning a brand new funding in Vietnam that might be price about $1 billion, to spice up its $1.5 billion manufacturing unit within the nation. Requested in regards to the doable funding plan on the time, Intel informed Reuters: “Vietnam is a crucial a part of our world manufacturing community, however we have now not introduced any new investments.”
Vietnam authorities’s official portal had talked about plans to draw $3.3 billion in extra funding from Intel, nevertheless it later eliminated that reference after the media reported it.
Intel and different multinationals have pressed the Vietnamese authorities to supply handouts price hundreds of thousands of {dollars} when it introduces a brand new levy on massive firms as a part of a worldwide tax overhaul. Plans for the tax and subsidies, resulting from be imposed subsequent yr, are nonetheless being mentioned.
(Reporting by Francesco Guarascio @fraguarascio; extra reporting by Max Cherney in San Francisco and Khanh Vu in Hanoi; Enhancing by Miyoung Kim and Miral Fahmy)
