Intel Corp (NASDAQ:INTC) is considering a significant increase from its current $1.500 billion investment in Vietnam to expand its chip testing and packaging plant in the Southeast Asian nation, two sources familiar with the matter told Reuters.
The potential investment, which one of the sources said could be around $1 billion, would bolster Vietnam’s growing role in the global semiconductor supply chain as companies try to reduce their dependence on China and Taiwan due to political risks and trade tensions with the United States.
One of the sources said the investment would likely be made “in the next few years” and could be even higher than $1 billion, while the second person said Intel was also weighing alternative investments in Singapore and Malaysia, which could be preferred to Vietnam.
Both sources requested anonymity, as the plan has not yet been made 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 investment.”
Senior officials from Vietnam’s Ministry of Investment and Planning and the provincial government of Ho Chi Minh City, where Intel has an existing plant, were not immediately available for comment.
A statement on Vietnam’s official government website was amended Wednesday to remove a reference to an effort by Ho Chi Minh City to attract $3.300 billion in additional investment from Intel.
The chip packaging and testing factory in Vietnam’s southern mall is Intel’s largest worldwide. It is estimated that the company has invested about 1,500 million dollars to date.
The U.S. chip giant already has additional land at its plant and an expansion in Vietnam would help it better manage supply disruptions stemming from relying heavily on a single country or a single plant, one of the sources told Reuters, citing internal conversations.
One of the sources said Intel was weighing investment in Vietnam while ensuring further overseas expansion would not be seen as a hostile move by Washington, which is pushing to boost chip production at home.