Intel to treble Vietnam investment to $1 bln-sources

HANOI, Nov 8 (Reuters) Intel Corp., the world's largest chip maker, is to more than treble its investment in building two plants in Vietnam to $1 billion, sources familiar with the firm's plan said on Wednesday.

''The licence for the increased investment to $1 billion will be handed to Intel on Friday,'' said a source close to the management board of Saigon High-Tech Park, where Intel's Vietnam unit is building its first plant.

When licensed in February for an initial investment of $300 million, Intel's project to package and test microchips that power personal computers and mobile phones was the biggest investment in Vietnam by a U.S. company.

Vietnam, which has one of the world's fastest-growing economies after China, became the newest member of the World Trade Organisation on Tuesday and many economic analysts expect investment to increase.

Next week, the Communist-run country's thriving economy will be on show when Hanoi hosts the Asia-Pacific Economic Cooperation leaders' week, with hundreds of company executives attending.

A second source familiar with the deal said that initially, California-based Intel had an option to build a second phase for its plant that would double the investment to $605 million.

''But now it wanted to bring the investment up to $1 billion in the second phase,'' said the source, who declined to be identified due to a lack of authorisation to give details.

Intel Products Vietnam said in an invitation received by Reuters that Intel Deputy Chairman Brian Krzanich would announce the new investment level at a ceremony in Ho Chi Minh City, Vietnam's commercial centre, on Friday.

In February, Intel Chairman Craig Barret said production at the Vietnam plant, its seventh in the world, would start in the second half of 2007.

RISING INTEREST Industry officials say the Intel project would help Vietnam draw foreign investors, including those in related businesses.

''The attraction of U.S. group Intel to invest in the high-tech park,'' the park's board said in a statement, ''immediately created an attractive force to many companies and partners to survey on investment opportunity at the park''.

Vietnam's technology sector is relatively small, but the country has become the world's top producer of robusta coffee and black pepper, the second-largest rice exporter and Southeast Asia's third-biggest crude oil producer.

The International Monetary Fund said in its annual review of Vietnam's economy published on Tuesday that WTO membership would create opportunities for expanding non-oil exports and foreign direct investment, a big driver of the economy.

This year, pledges are expected to rise 19 percent from 2005 to $6.6 billion despite graft and lack of transparency in auditing and information.

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