Now, Vietnam has hit a few speed bumps along the road in its dreams to develop an IC manufacturing industry. As previously reported by EE Times, Intel Corp. has delayed its IC-packaging plant ramp in Vietnam. In addition, IC-packaging startup Vietnam-Chipscale Advanced Packaging Services (V-Caps) has put its plans to build a backend facility on the ''backburner,'' according to sources. And other chip multinationals, which were evaluating Vietnam, may have put their plans on ice--for now.

Vietnam does not have a front-end semiconductor fab. To jumpstart its IC manufacturing industry, the Southeast Asian nation entered the fray rather late by starting off in less costly chip-packaging and assembly. The nation appears to have low labor rates and an educated workforce. Intel and V-Caps represented the first two real chip manufacturing projects in Vietnam.

Despite the setbacks, Vietnam is down but not out of the semiconductor manufacturing game. ''The government's roadmap is clear, and they are working toward establishing the semiconductor industry and boost the exports in Vietnam,'' according to a report published last year by Frost & Sullivan. ''People in Vietnam believe that even if they are late comers, the country will soon rise by creating a niche and challenging the other Asian majors like China, Singapore, Malaysia, Thailand and Indonesia.''

''IC-packaging will almost certainly happen in Vietnam, but it has been delayed by one or two years,'' according to another analyst who is familiar with the region. ''I'm pretty sure Vietnam is a core part of Intel's manufacturing strategy going forward, and at this point, I have little doubt that they will get their facility up and running. Once they are established, others will follow. I'm aware of at least a half-dozen major IDMs who were all looking at Vietnam as a possible location for expansion prior to the downturn.''