It is also a part of the company's worldwide production-capacity expansion that will involve spending $6 billion to increase manufacturing capacity around the world.

Craig Barrett, Intel's chairman, said the initial negotiations between Intel and the Vietnamese government began in 2001, and under the plan, production will be underway in the second half of next year.

The company will invest an additional $305 million in the second phase.

The plant is to be built at Saigon High Tech Park in Ho Chi Minh City, Vietnam's commercial centre, and output will be for supply to the worldwide market.

"This facility in Vietnam is Intel's seventh. We also have facilities in China, the Philippines and Malaysia. This will not replace any of those and we will continue to increase the production capacity at our existing plants. In all we have set aside a budget of $1 billion for Asia," said Barrett.

The Vietnam facility is to produce Intel's chipset product family. The first phase of investment required $300 million.

The company is committed to investing up to $605 million in Ho Chi Minh City, making Intel the first and biggest foreign company to invest in high technology in Vietnam. About 1,200 people will work at the new plant.

Intel's investment decision was based on an apparent readiness in Vietnam, especially physical infrastructure for transport and reliable supplies of electricity and water, as well as a good education system and the low costs of operation.

"We also had the government's strong commitment and support. We will continue to look for opportunities in many countries, but for Thailand right now we have no investment plans. It is nothing to do with political issues in Thailand, but we have to pick up the best opportunities. In Southeast Asia we will continue to enhance existing facilities. For example, we plan to upgrade the plant in the Philippines to a high-technology facility," said Barrett.

In Southeast Asia Intel intends to promote the development of WiMAX. In the company's worldwide schedule this year there will be around 40 to 50 trials of WiMAX around the world.

"WiMAX suits countries where the wired infrastructure is not so good," said Barrett.

In Thailand, WiMAX trials are being conducted in communities in Khorat, Chiang Mai and Roi Et to test services for rural and suburban healthcare, education, SMB incubation, agriculture supply chain integration and other consumer services such as Voice-over-IP.

The trials will help assess technical and commercial viability models using different backhaul and last-mile WiMAX architecture, and will be reviewed by international aid organisations as a possible blueprintfor         Asean countries.

The assembly and testing process is a critical phase of production that occurs before the products are delivered to customers. Assembly and testing consists of packaging, testing, and shipping. The assembly and testing process is vital to the success of the company's platform strategy. As the strategy progresses, the focus is on ensuring the organisation is able to handle the added complexities that come with the transformation, said Brian Krzanich, assembly and test manufacturing co-general manager.

Assemble and test facilities package chips that come from semiconductor fabrication plants, known as "fabs". The individual chips (or die) on each wafer are separated and inserted into protective packages that provide the connection between the die and other devices.

Packaged units then undergo stress testing and are also checked for electrostatic discharge levels. When testing is complete, the units are categorised into bins and given a final outgoing inspection before being boxed and shipped to customers.

Intel's assemble and testing facilities are in Malaysia (Penang and Kulim), the Philippines (Cavite), China (Chengdu and Shanghai), San Jose, Costa Rica, and now in Vietnam's Ho Chi Minh City.

asina@nationgroup.com

Asina Pornwasin

The Nation

Ho Chi Minh City