DailyTech - Intel Expands Vietnam Investments

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IT Intel Expands Vietnam Investments
Tuan Nguyen (Blog) - November 15, 2006 12:53 PM

14 comment(s) - last by GI2K.. on Nov 16 at 5:46 AM

Vietnam a hot-house for IT companies

Intel this month announced some large expansion plans focusing on increasing production capacities in the Pacific Asia region, specifically Vietnam. The microprocessor giant said in a press release that despite having launched a major location in Vietnam earlier this year, the initial size is now too small. Intel said that its Vietnam location would be expanded from 150,000 square feet to roughly 500,000 square feet. Intel initially invested roughly $300 million USD into its Vietnam project, but now estimates that its total investment in Vietnam will mount to roughly $1 billion -- a staggering investment for the location.

According to the original press release:

The new Vietnam facility will be the largest single factory within the Intel assembly and test network. With the additional capacity plans, construction is now expected to begin in March. Production will begin in 2009 and could eventually employ as many as 4,000 people.

Intel also indicated that the reason for the major expansion is all about efficiency. According to Intel, 500,000 square feet of facility space will enable the company to produce and test new products more quickly than previously possible. Intel's vice president and general manager Brian Krzanich said "by expanding the planned size of this facility we expect to gain greater efficiency to improve our ability to meet our customers' requirements."

Besides the $1 billion investment, Intel also plans to invest another $6 billion total worldwide within the next two years. Intel's facility in Vietnam however, will become the company's largest factory within its assembly and test network. Despite its size, the facility is not a fabrication zone. DailyTech previously reported that Intel applied for a license with the Vietnamese government to open an actual fab. Other companies that have large presences in Vietnam include Western Digital and NEC. NEC opened its second major facility in Vietnam in June of this year.

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Helping the economy?

By Spivonious on 11/15/2006 1:14:00 PM , Rating: 1

Nothing against the Vietnamese, but how does Intel investing $1,000,000,000 into Vietnam going to help the U.S. economy? I think it's understood that companies should invest money back into their base, not a foreign country.

RE: Helping the economy?

By noxipoo on 11/15/2006 1:25:51 PM , Rating: 3

where does it say intel is doing this to help the US economy?

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RE: Helping the economy?

By TomZ on 11/15/2006 1:26:13 PM , Rating: 3

quote:
I think it's understood that companies should invest money back into their base, not a foreign country.

Intel's objective, as a publicly-held corporation, is to their shareholders to deliver profit, not to promote America and American interests.

If American interests are helped by Intel's actions that is great, but obviously Intel in this case has decided that this investment in Vietnam makes sense for the business. It would not be good for Intel shareholders to make investments in America and to hire American workers if the same work can be done more efficiently elsewhere.

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RE: Helping the economy?

By othercents on 11/15/2006 2:13:18 PM , Rating: 3

quote:
Intel's objective, as a publicly-held corporation, is to their shareholders to deliver profit, not to promote America and American interests.

It is all about profit and would you blame them? If they can produce the same quality product for less then they will do it. They still build plants in the US and provide plenty of jobs, but overall they will still have more jobs overseas because it is cheap.

Because most companies are doing this you are going to see less and less middle class jobs and more low end (Walmart), high end (corporate CEO), or entrepreneurs in the US. So now it is time to Sink, Swim, or Fly. If you are not making money you are going to be loosing it. This is the way it is and people need to start taking hold of their own destiny instead of sitting back and thinking there job will be available in the future.

Other

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RE: Helping the economy?

By tuanming on 11/15/2006 1:29:05 PM , Rating: 2

Because $1 US Dollar is equal to 16,000 Dong with a little over a 1 dollar a day you can eat til you're full (breakfast, lunch, and dinner). Intel made a very smart move because Vietnam is THE best spot to do business especially when labor is paid cheaply . My guess is that Intel will each assembly/employee around 2-3 dollars max! And + for the Vietnamese people that are looking for job it's kinda hard nowadays to get a decent paying job in Vietnam.

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RE: Helping the economy?

By Spivonious on 11/15/2006 1:49:05 PM , Rating: 2

Cheap labor rules all I guess. What about the countless IT/CS/CE/EE people coming out of college nowadays looking for a job? Everything is outsourced and the unemployment rate goes up. If Intel (or any big company for that matter)could look past saving a few bucks and build up the company using local workers, they will not only continue making a profit, but also provide careers for the future of the U.S.

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RE: Helping the economy?

By TomZ on 11/15/2006 1:56:23 PM , Rating: 3

Yes, because after all, it is Intel's job to ensure the standard of living for tech workers in the U.S. - NOT. As I said above, Intel is held accountable to its shareholders for profit, not for helping to solve standard of living issues for Americans. Get real.

Your concern is a real one, and I understand and appreciate it, but it is not Intel's job to solve that problem. It is a something that needs to be addressed by our society as a whole.

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RE: Helping the economy?

By msva124 on 11/15/2006 4:07:28 PM , Rating: 2

What? There is plenty of work for skilled labor in the US. Key word skilled. If you're only as good as your indian counterpart, yes you might have trouble finding a job.

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RE: Helping the economy?

By GI2K on 11/16/2006 5:46:57 AM , Rating: 2

lol dude you think Intel or anyone else for that matter is engaging unskilled labor? they may have changed of country but the requirements for a job still more or less the same.

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RE: Helping the economy?

By iNGEN on 11/15/2006 4:48:16 PM , Rating: 3

I thought this thread had to do with Intel expanding production capacity...

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obscure reference

By FightingChance on 11/15/2006 1:35:53 PM , Rating: 3

Charlie's in the fabs!

RE: obscure reference

By deeznuts on 11/15/2006 1:47:14 PM , Rating: 2

LOL. Man, things are already getting expensive there, now the food and entertainment ;-) going to be even more! Keep it cheap!

On a serious note, the last time there was rampant foreign investing was I'd say late nineties, where Vietnam was one of the asian tigers. But corruption and red tape was too rampant. I think they have taken care of a lot of that on the national level, but the local corruption and red tape is still there. I guess with this and the WTO Intel stands a better chance than most.

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What will AMD do?

By Gdepp519 on 11/15/2006 4:32:34 PM , Rating: 2

I'm definitely an AMD'Fanboy.. but what I'm more focused on is what this huge expansion will do to AMD and how it will react... specifically what recourse will it take.. because I was under the assumption that AMD is still playing catchup with Intel.. and is currently improving its facilities in "Russia??" I believe...

Personally I'm curious as to what move AMD intends to make next and wether or not they have the resources to invest billions into development.. perhaps their new friends such as dell and their new ATI acquisition will help them to cope???

CPUs or Communications

By iNGEN on 11/15/2006 4:51:47 PM , Rating: 2

Does anyone know if this expansion is intended to support CPU production?

Cause I'm gonna go out on a limb and guess this has to do with communications hardware predominately intended for the asian markets. Anyone have the real info?