Intel has decided not to expand its operations in Vietnam, which is a setback for Vietnam’s plans to become a major player in the global semiconductor supply chain. The company’s existing $1.5 billion plant in Ho Chi Minh City is its largest for chip assembly, packaging, and testing. Intel had been considering a $1 billion expansion of the factory, but decided against it in July. The company cited concerns about power supplies and bureaucracy in Vietnam. The country’s growing economy has put strain on its power grid, leading to blackouts, while bureaucracy has been a challenge for foreign investors. Vietnam had been hoping to attract investment from chip-makers as an alternative to China and Taiwan, but Intel’s decision is a blow to those plans. It shows that Vietnam’s semiconductor ambitions may have outpaced its capacity, and the country may need to make changes before it can catch up with its recent growth.

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