Hanoi (VNA) –🐽 Intel Corp is considering a significant increase in its existing 1.5 billion USD investment in Vietnam to expand its chip testing and manufacturing plant in the Southeast Asian nation, two sources familiar with the matter told Reuters.

According to Reuters, the possible move, which one source said could be worth about 1 billion USD, will signal a growing role for Vietnam in the global supply chain for semiconductors, as companies push to cut reliance on China in the context of trade tensions with the US. One of the sources said the investment will be likely to be made “over the future years” and could be even bigger than 1 billion USD, while the other said Intel was also weighing alternative investment in Singapore and Malaysia, which may be preferred to Vietnam. Both sources sought anonymity as the plan was not yet public. Asked about the possible investment plan, Intel told Reuters: “Vietnam is an important part of our global manufacturing network, but we have not announced any new investments.” The chip packaging and testing factory in Ho Chi Minh City, Vietnam’s southern commercial hub, is Intel’s biggest worldwide. The company is estimated to have invested about 1.5 billion USD in the country so far. The US chip giant already has extra land where its plant is based, and an expansion in Vietnam will help it better manage supply disruptions stemming from relying heavily on a single country or a plant, said one of the sources close to Reuters, citing internal talks. Vietnam is aggressively pushing to expand its chip making industry, courting foreign companies in all the three main segments of assembling, testing and packaging; manufacturing and fabs; and designing. A US industry executive told Reuters that Vietnam had big potential to grow quickly in the area of chip assembling and designing, whereas he saw developing chip-manufacturing fabs as a remote possibility, with the exception of cheaper-to-build fabs for less sophisticated, bigger chips that are still in high demand, such as those that go into automobiles. The executive said Vietnam’s biggest opportunity was in the chip assembling sector to satisfy industry demand to reduce “over-concentration” of production capacity in China’s mainland and Taiwan, which together account for 60% of the global capacity in that segment. Designing chips requires less capacity and more highly skilled workers, and Vietnam was making inroads there too. US giant Synopsys has operations in Vietnam, and local firms, including FPT and Viettel, are expanding fast. Electronics giant Samsung of the Republic of Korea opened a research facility in Hanoi late last year and has a semiconductors packaging plant in the country. Following a global shortage of semiconductors in the wake of the COVID-19 pandemic, Intel announced a plan in late 2021 to invest more than 7 billion USD to build a new chip packaging and testing factory in Malaysia. The facility is expected to begin production in 2024. Intel also has testing and packaging facilities in China and the US./.