Chipmaker struggles to build first plant in Vietnam
A state-owned chipmaker plans to set up its first plant in Saigon, but the government is appealing to the company to rethink its plans and to partner instead with a foreign company that will utilise its technologies.
Saigon Industry Corporation SIC has put on hold its project, which is part of the city’s plan to boost IC technology by 2020, after the People’s Committee raised its petition that stemmed from critics who are concerned about product demand and human resources, Thanh Nien News reported.The chipmaker initially scheduled the construction of the 10-hectare plant to begin by the end of 2014. Its estimated cost is $250 million for the first phase alone. SIC now plans to start the construction of the new facility at the Saigon Hi-Tech Park next year. The company expects the factory to be completed in two years.The plant is expected to manufacture 5,000 to 10,000 integrated circuits monthly, which will increase as all operations go in full swing later on. These ICs include power management chips, radio-frequencyThe number of complete cycles or vibrations per unit of time. Rate of alternation in an AC current. Expressed in cycles per second or hertz (Hz). identification chips and common chips.On an annual basis, the Saigon facility will fabricate 1.8 billion chips. It is projected to earn $90 million in revenues. However, even if this project pushes through, it will only provide 9 per cent of the total chip demand in the country. Yearly, Vietnam consumes more than 20 billion chips—mostly imported—worth approximately $2 billion.The government recently included SIC’s plant in its 2011-2020 national programme for development of advanced technologies, allowing the company to receive incentives such as financial support and tax breaks among others.SIC can avail of a tax waiver for four years once the factory starts its operation and another 50 per cent waiver for the succeeding nine years. The company’s imports will also be tariff-free for five years. In addition, it can borrow money from the Vietnam Development Bank up to 60 per cent of the total cost.