Why Intel Is Injecting $475M More Into Vietnamese Chip Assembly Unit

Intel Corporation's INTC is launching a fresh round of investment in its Vietnamese unit. This comes soon after incoming CEO Pat Gelsinger revealed the company's intention to rely big on internal manufacturing for its product line-up leading up to 2023.

What Happened: Intel announced that it has invested $475 million in Intel Products Vietnam, in addition to the $1-billion investment made in the chip assembly and test manufacturing facility in Saigon Hi-Tech Park in 2006.

The total investment in the facility now stands at $1.5 billion.

A $475-million investment made between June 2019 and December 2020 helped enhance manufacturing of the company's 5G products, Intel Core processors with Intel hybrid technology and 10th-generation Intel core processors, the company said in a statement.

Related Link: Why The Best Outcome For Intel Shareholders Is To Break Up The Chipmaker

Why It's Important: Intel Products Vietnam IPV is the largest assembly and test manufacturing facility in the Intel assembly and test network.

The unit will continue to diversify and improve its local operations so that it can take on more complex technologies and new products to enable Intel to tap new market opportunities, the company said.

Intel's decision to keep in-house manufacturing has drawn mixed reactions from analysts. Some see the decision as a step backward, given that Intel will lag the foundries in terms of processor node technology even if the company executes on its current plans.

Intel is navigating through challenging times, as it has widely viewed as having ceded technological leadership and market share to rivals such as Advanced Micro Devices, Inc. AMD and NVIDIA Corporation NVDA.

INTC Price Action: Intel shares were slipping by 1.76% to $54.24 at last check Wednesday. 

Related Link: Why Intel's CEO Transition Is A Negative For AMD: Analyst

Photo: Intel.