Intel calls off planned chip operation expansion in Vietnam, which positions itself as a China alternative: source

Intel, the American chipmaker, has decided not to go ahead with a major investment in Vietnam, which would have significantly increased its operations there. This decision is a setback for Vietnam, which is trying to grow its role in the global semiconductor industry. Vietnam is home to Intel's largest assembly, packaging, and testing facility, and the country was hoping for further expansion, especially after President Joe Biden's visit in September, where he announced support for Vietnam's chip industry. Vietnam is aiming to become an alternative manufacturing location to China and Taiwan, considering the ongoing political tensions and trade issues with the United States. However, after Biden's visit, it was revealed to a small group of American business leaders that Intel had put its expansion plans on hold. The decision was reportedly made in July, but the reasons for the cancellation were not disclosed. However, concerns about reliable power supply and bureaucratic hurdles were mentioned by a source who attended meetings with Vietnamese officials. Intel has not commented on the specifics of the plan but has stated that Vietnam remains a key part of their global manufacturing network due to the increasing demand for semiconductors. The U. S. embassy in Hanoi and the Vietnamese government have not commented on the matter. Intel's reversal is a disappointment for Vietnam, which has been engaging with chip manufacturers to attract investment and diversify the supply chain. The news comes after Intel announced significant investments in Europe and as Vietnam faced power shortages that impacted manufacturing. Intel is also investing in chip packaging in Malaysia, a regional competitor. During Biden's visit, the White House announced initiatives with other U. S. chip firms, but Intel was not mentioned. A legal expert warned that Intel's past investments in Vietnam do not guarantee future ones. Earlier reports suggested that Intel was considering a new $1 billion investment to enhance its Vietnamese factory, but Intel did not confirm this. The Vietnamese government had hinted at attracting $3. 3 billion in additional investment from Intel, but this reference was removed from their official portal following media coverage. Intel and other multinational corporations have been lobbying the Vietnamese government for financial incentives in response to a new global tax reform that will introduce a levy on large companies. Discussions on the tax and potential subsidies are ongoing.