Prime Minister Nguyen Tan Dung has agreed in principle to permit Saigon Industry Corporation to build a chip making factory worth 6.6 trillion VND (309 million USD).

This will enable it to enjoy policy incentives from the Vietnam Development Bank loans worth up to 60 percent of the total investment cost.

The project will be exempt from import tax for five years - and probably also from value-added tax on equipment and supplies that are not produced locally. This will help the company's research and development activities.

Since it will apply high technology, the project will also enjoy a preferential tax of 10 percent for a period of 30 years, tax exemption for four years, and a 50 percent tax reduction for nine years.

In addition, it will get financial assistance under Decision 2457/QD-TTg on the national hi-tech development programme until 2020.

The project will be developed in accordance with the Government Decision 842/QD-TTg dated June 1, 2011. The Prime Minister has told HCM City government to appraise and approve the project.

He has also told it to make sure the investor implements the project in accordance with regulations and to make sure money is invested efficiently.

As proposed previously by the City government and the investor, a chip plant will be developed at Saigon Hi-Tech Park (SHTP). The investor has leased 10 hectares at the park.

In the middle of 2012, the HCM City authorities launched the chip industry development programme with a vision to achieve the sector's annual revenues of 100-150 million USD by 2017. The programme will train about 2,000 engineers and technicians, and serve about 30 companies.-VNA