Ho Chi Minh City has called on a state-owned chip maker that was about to build its first plant to reconsider its plans and tie up instead with some global company to make use of their technologies and markets.
The People's Committee’s exhortation to Saigon Industry Corporation, which was struggling to launch the project -- a key part of the city's plan to develop IC technology by 2020 – comes in the wake of concerns raised by critics about demand of the products and human resources, Tuoi Tre newspaper reported Monday
Estimated to cost US$250 million in the first stage, the plant’s construction was originally scheduled to start last year-end.
According to Saigon Industry Corporation's latest plans, construction of the 10-hectare plant at the Saigon Hi-Tech Park will start next year and finish in two years.
To start with it will produce 5,000-10,000 integrated circuits a month, including common chips, radio-frequency identification chips, and power management chips, and the capacity will be increased later.
The factory is ultimately expected to produce around 1.8 billion chips a year, earning revenues of $90 million.
But it will satisfy just 9 percent of demand in Vietnam, which consumes more than 20 billion chips a year worth an estimated $2 billion, most of them imported.
In May the government added the plant to a 2011-20 national program for development of advanced technologies, meaning it will get incentives like tax breaks and financial support, according to the Saigon Times Online.
The company can borrow up to 60 percent of cost from the Vietnam Development Bank, will get tax waiver for four years after the factory opens and a 50 percent waiver for the next nine, and its imports will be tariff-free for five years.