Prime Minister Nguyen Tan Dung has agreed in principle to add a chip production project of Saigon Industry Corporation (CNS) to the hi-tech industries development plan towards 2020.

According to the Government website, the project of CNS will be able to enjoy policy incentives such as Vietnam Development Bank loans worth up to 60% of the total investment cost.s

The project will be exempt from import tax for five years and probably from value-added tax on equipment and supplies which are not produced locally to facilitate its research and development activities.

Since it will apply high technology, the project will enjoy a preferential tax of 10% for a period of 30 years, a tax exemption for four years, and a 50% tax reduction for nine following years. In addition, it will get financial assistance under Decision 2457/QD-TTg on the national hi-tech development program until 2020.

The Prime Minister assigned the HCMC government to appraise and approve the project, require the investor to implement the project in accordance with regulations and ensure its investment efficiency.

As proposed previously by the city government and the investor, a chip plant would be developed at Saigon Hi-Tech Park (SHTP) in District 9. The investor signed a deal to hire 10 hectares at the park.

A source from the SHTP Authority told the Daily last week that 10 hectares for the project had been made ready.

According to the initial plan, CNS’ chip project has an estimated investment of VND6.6 trillion.

In the middle of 2012, the HCMC government launched the chip industry development program with annual revenues of US$100-150 million. The program will train around 2,000 engineers and technicians, and incubate about 30 companies.

The program’s initial cost was estimated at VND7.5 trillion, inclusive of the plant of CNS which is expected to supply an approximate 1.8 billion chips per year and generate revenues of US$90 million annually.

Currently, in addition to the project of Intel Products Vietnam, SHTP has attracted investments of domestic enterprises like the integrated circuit production project worth over US$257.5 million of Saigon Semiconductor Technology Inc. (SSTI).

Last April, Hoang Nguyen Investment Co. was licensed to produce biochips for medical diagnosis at a cost of about US$27.9 million.