Chip, Intel invests in Vietnam and gives up on Germany and Italy?
Intel plans to invest $1 billion in Vietnam, where it already has a microchip packaging factory. Meanwhile, the American company is asking for (many) more public aid from Germany. Are plans for Italy at risk?
Intel, a US company that produces semiconductors and other integrated circuits, is evaluating a "significant" increase – as Reuters defines it, which gave the exclusive news – of its investments in Vietnam in the manufacture of microchips.
Intel has already spent $1.5 billion on a chip testing and packaging facility in Vietnam. But now, according to the two agency sources, he could invest another billion, or perhaps more.
THE NEW CENTRALITY OF SOUTH-EAST ASIA
However, the choice of Vietnam is not definitive: the company is also evaluating Singapore and Malaysia, where at the end of 2021 it had announced an investment of over 7 billion for a microchip testing and packaging factory: it will be operational, it is estimated, in 2024.
Regardless of the country that will ultimately be selected, the news nonetheless recounts the growth in the importance of South-East Asia as a manufacturing pole at a time of reorganization of international supply chains : the process, driven above all by the United States, is aimed at reducing dependence from China for technological components.
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WHAT INTEL DOES IN VIETNAM
Intel owns a microchip testing and packaging factory in Vietnam, in Ho Chi Minh, the country's most populous city, located in the south. The plant has so far received investments of approximately 1.5 billion dollars.
The company already owns additional land at the plant site, and if it decides to expand it, according to Reuters sources, it could better manage any semiconductor supply bottlenecks. However, Intel is being held back by the United States government, which is trying to convince American companies to increase chip production domestically.
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Even Vietnam, however, is working to attract foreign investment in its semiconductor sector; and the component assembly segment appears to be the fastest growing.
A US industry source told Reuters that Vietnam would do well to focus on the assembly phase, in order to help dilute the excessive concentration of production capacity in Taiwan and – for less sophisticated chips – in China.
SAMSUNG'S MOVES
South Korea's Samsung, another big name in the electronic components market, also owns a semiconductor packaging plant in Vietnam, and last year it also opened a research facility in Hanoi. The country could also become an important pole in the planning phase ( design ) of microchips, which requires less capital but more highly skilled workers than actual manufacturing.
INTEL GOING BACK TO GERMANY?
As it considers expansion into Southeast Asia, Intel is rethinking its plans for Europe. The German newspaper Handelsblatt revealed on Wednesday that the company has asked the German authorities for at least 10 billion euros in public subsidies for the construction of the planned semiconductor factory in Magdeburg: the funds already approved are much less, 6.8 billion.
The rethink would be due to high energy prices in Europe and the rise in raw material prices, which have upset the company's calculations and pushed up investment costs.
ARE INTEL PLANS IN ITALY AT RISK?
It's not clear what will happen. Intel had said it was monitoring the situation and would calibrate investments according to market trends.
Given that Magdeburg is expected to be a manufacturing plant, any backtracking by Intel could jeopardize the company's plans for Italy , where it plans to open a testing and packaging plant (the last phase of the chip supply chain ) in Vigasio, in Veneto. The investment has an estimated value of 4.5 billion euros, which the government could cover with public funds up to 40 percent of the total amount.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/intel-vietnam-aumento-investimento-chip/ on Fri, 10 Feb 2023 12:35:41 +0000.