The Ho Chi Minh City facility, announced in 2006, was supposed to begin production by the end of 2009. Now, the $1 billion Vietnam factory ''will begin production in Q3 2010,'' according to a spokesman for Intel in Vietnam.

For now, Intel still has enough backend capacity. But Intel's Vietnam facility is a critical piece of the company's manufacturing puzzle, especially as it consolidates its backend plants. When completed, the Vietnam plant will supposedly be the largest single factory within the Intel assembly and test network.

''We expect construction to be done by end '09 and production in '10. We've not wavered in our commitment to get the facility online,'' according to another spokesman for Intel in Asia-Pacific.

''The reason for the differential (in the time schedule) is relatively prosaic -- as with any greenfield site, there are teething issues,'' the spokesman said. ''In Vietnam we fell foul of the monsoon first year out; then had a contractor not match up to our expectations. We've worked through all these and continue to push to get construction done.''

When Intel announced the plant in 2006, the chip maker made a big deal about the event. The facility is said to be the first investment of its kind by the semiconductor industry in Vietnam. This is believed to be the first IC-assembly plant in Vietnam. There are no fabs in that nation.

In early 2006, Intel announced it would invest $300 million to build a semiconductor assembly and test facility in Ho Chi Minh City. Then, later the same year, Intel said it would increase the size of the assembly and test facility it is building in Vietnam from 150,000 square feet to 500,000 square feet. It raised its investment from $300 million to $1 billion.

Intel decided to increase the size of the facility after an internal study determined that 500,000 square feet was the most efficient size for assembly and test facilities. Production was supposed to begin in 2009 and could eventually employ as many as 4,000 people.

The plant, according to Intel, is still critical. Intel is in the process of consolidating its IC-assembly capacity. ''Our decision to take offline some older facilities earlier than originally intended (in Malaysia, China and the Philippines) increases Vietnam's importance in this regard,'' according to the spokesman.

In January of 2009, the chip giant closed two fabs and three IC-assembly factories. Faced with the current IC downturn and slowing sales, the company planned to close two existing assembly test facilities in Penang, Malaysia and one in Cavite, Philippines. It also halted production at Fab 20, an older 200-mm wafer fabrication facility in Hillsboro, Ore. Additionally, wafer production operations will end at the D2 facility in Santa Clara, Calif.

Then, a month later, Intel said it planned to close its IC-packaging plant in Shanghai, China--a move that would eliminate 2,000 jobs. Hit hard by the downturn and slowing sales, Intel plans to shift the operations from Shanghai to Chengdu over the next 12 months.

In July, Intel announced it would eliminate 294 jobs in its Ireland fab operations and related service groups due to reduced demand for older 200-mm products manufactured there. The layoff would not impact any of the 300-mm jobs in Intel's Fab 24 in Leixlip, County Kildare, Intel said. The company also operates two 200-mm fabs in that location.

By: DocMemory
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