Announcing a big leap into the technology sector, Ho Chi Minh City authorities have given the green signal for the establishment of the country's first chip production plant.
The city People's Committee has directed the Saigon Industry Corporation to design a plan and begin work on the facility as soon as possible.
While the project is estimated to cost US$200 million, Dr. Le Hoai Quoc, deputy director of the Department of Science and Technology, said the exact figure will be unveiled after the corporation finishes on the preliminary project design.
"The output levels of the chip production facility will depend on the capital investment. For example, a $200 million unit can produce chips with a diameter of 250-130 nanometers. The chips can be used in devices ranging from household electrical appliances to digital products," said Ngo Duc Hoang, director of the Integrated Circuit Design Research and Education Center.
"The plant will help develop the country's chip design industry and promote the manufacture of home appliances, digital products, cell phones and many other industries," said Hoang.
An expert, who wished to be unnamed, said once operational after 2-4 years of construction, the plant can bring in $115 million per year, including $90 million from selling chips, $15 million from supplying terminal equipment, and $10 million from outsourcing products to small and medium chip designers in Vietnam, South Korea, China, Singapore, and Malaysia.
Meanwhile, Vo Huu Hai, general director of integrated circuit designer Vietnam Semiconductor Manufacturing Company (VSMC), said that Saigon Industry Corp. should study market demand and invest in corresponding technology.
He also said if the investor spends too much time building the plant, it may lag behind in terms of technology once it becomes operational.
An expert, who invited a US-based chip designer to set up a unit in Vietnam in 2008, but wanted to go unnamed, said that owing to the country's inexperience in chip production, he doubted the plant will attract local or foreign chip designers.
Chip designers in Vietnam like AMCC, Renesas, E-Silicom, Arrived Technology, Signet, Viet-Vmicro, and VSMC have worked with chip maker giants such as Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. for years.
Quoting a survey by market research firm In-Stat, Ngo Duc Hoang of the Integrated Circuit Design Research and Education Center said that Vietnam's demand for imported chips has increased significantly over the past decade. The country imported an estimated $1.28 billion worth of chips this year.