Vietnam’s Vingroup Teams Up With Intel To Use IoT Technology In Electric Vehicles And Batteries

Vingroup, the biggest conglomerate in Vietnam, has reached a deal with Intel to develop 5G technology for a range of industries in the fast-developing Southeast Asian country, especially in the hot field of electric vehicle production.

The Vietnamese conglomerate, led by billionaire Pham Nhat Vuong, said in a statement last week that it had signed a memorandum of understanding with the U.S. semiconductor giant to create a wide range of advanced computing systems. Intel, which has a $1.5 billion state-of-the-art chip assembly and test manufacturing facility in Vietnam, is likely to design the technology for Vingroup, analysts say.

The companies will collaborate largely to install Internet-of-Things technology in factories such as those that make electric vehicles and EV batteries for Vingroup’s automotive arm, VinFast, the statement said. VinFast, launched in 2016, is expanding at home and overseas to command a share of the lucrative yet competitive EV market. In March, VinFast signed a memorandum of understanding with the North Carolina state government to start up its first U.S.-based electric vehicle and battery plant factory.

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Automotive factored particularly into Intel’s thinking. “The digitization of everything is contributing to the insatiable need for semiconductors, especially in the automotive sector,” Intel CEO Pat Gelsinger said in the statement.

Intel could potentially support wireless communications between EV battery modules as other tech firms have done for automotive, says Sam Abuelsamid, a principal analyst with market research firm Guidehouse Insights. For example, UMC, Taiwan’s No. 2 contract chip maker after TSMC, announced in April that it is building a production plant for power chips with Toyota-backed car-parts supplier Denso to make semiconductors in Japan.

“Intel has wanted to get back into providing processors as vehicles go into centralized compute,” Abuelsamid says. On VinFast’s side, he says, “the market for EVs is very competitive and the question is whether VinFast can produce a vehicle at a certain level of quality that consumers expect today—at a [fair] price point.” Last year, Vingroup began to discuss with Foxconn, the world’s largest contract assembler of consumer electronics, about working together in electric vehicles.

Still in the automotive realm, the pair would work on AI systems for driver interface and possibly come up with in-vehicle applications, the Vingroup statement said.

Intel’s 5G-enabled technology would further support the Vietnamese conglomerate’s Vinhomes Smart City development, a high-end housing project in Hanoi with security and other features that run on artificial intelligence.

Intel will shape up as a “service provider” in its deal with Vingroup, forecasts Adam McCarty, chief economist with Mekong Economics in Hanoi. Vingroup would have relations with big names, he says, and its partnership with Intel should particularly bring safer roads to Vietnam via the smart-city component of their partnership.

“The match there would be that Vingroup doesn’t have the technology, but for the design phase, whether their cars, their motorbikes or their apartments, they do have a lot of distribution,” says Frederick Burke, Ho Chi Minh City-based senior advisor with global law firm Baker McKenzie. Vietnamese consumers know the Intel brand, another boost to Vingroup, Burke adds.

The conglomerate already does a ubiquitous share of business in Vietnam’s core economic sectors, iuncluding real estate, retail and healthcare.

Vietnam’s GDP will grow 6.8% this year, up from 2.6% in 2021 and 2.9% in 2020 as its Covid-19 outbreak eases, according to a Fitch Solutions report in a March. Vietnam had swung into fast growth before the pandemic on export manufacturing.