Vingroup in Vietnam merges with Intel to use IoT technology in electric vehicles and batteries

Vingroup, Vietnam’s largest conglomerate, has reached a deal with Intel to develop 5G technology for a number of industries in the fast-growing Southeast Asian country, especially in the hot electric vehicle industry.

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

The companies will work closely together 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. Launched in 2016, VinFast is expanding at home and abroad to gain share of the lucrative but competitive EV market. In March, VinFast signed a memorandum of understanding with the North Carolina government to launch its first US-based electric vehicle and battery factory.

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Cars were taken into account especially in Intel’s thinking. “The digitalization of everything contributes to the insatiable need for semiconductors, especially in the automotive sector,” said Intel CEO Pat Gelsinger in a statement.

Intel has the potential to support wireless communications between EV battery modules, as have other technology companies in the automotive industry, said Sam Abuelsamid, chief analyst at market research firm Guidehouse Insights. For example, UMC, a contracted chipmaker №2 in Taiwan after TSMC, announced in April that it was building a power supply chip plant with Toyota-backed automotive semiconductor supplier Denso in Japan.

“Intel wants to go back to providing processors while vehicles go into centralized computing,” said Abuelsamid. On the part of VinFast, he says, “the electric car market is very competitive and the question is whether VinFast can produce a vehicle with a certain level of quality that consumers expect today – at [fair] price point. ” Last year, Vingroup began discussions with Foxconn, the world’s largest contractor installer of consumer electronics, about working together in electric vehicles.

Still in the automotive field, the pair will work on AI driver interface systems and will likely come up with in-car applications, the Vingroup statement said.

Intel’s 5G-enabled technology will further support the development of the Vietnamese conglomerate’s Vinhomes Smart City, a high-end housing project in Hanoi for sure, and other features that work on artificial intelligence.

Intel will emerge as a “service provider” in its deal with Vingroup, predicts Adam McCarthy, chief economist at Mekong Economics in Hanoi. Vingroup will have connections with big names, he says, and its partnership with Intel should bring safer roads to Vietnam through the smart city component of their partnership.

“It would be a coincidence that Vingroup does not have the technology, but for the design phase, whether their cars, motorcycles or apartments are widespread,” said Frederick Burke, a Ho Chi Minh-based senior adviser at global law firm Baker McKenzie. Vietnamese consumers know the Intel brand, another boost for Vingroup, Burke added.

The conglomerate already has a ubiquitous share of business in Vietnam’s major economic sectors, including real estate, retail and healthcare.

Vietnam’s GDP will grow by 6.8% this year, from 2.6% in 2021 and 2.9% in 2020 as the Covid-19 epidemic weakens, according to a March report by Fitch Solutions. Vietnam was booming before the export pandemic.

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