CHIP MAKER BULKS UP AT TAIWAN SITE: The Tainan Science Park in southern Taiwan is the site of a second 300- mm. fab project for United Microelectronics Corp. (UMC), a Taiwan- based semiconductor foundry. The $5- billion project is being built adjacent to an existing 300- mm. fab, known as 12A (in the center). At the same time, an R&D headquarters for UMC at the same location is nearing completion (on the right). The new facility is designed to produce 50,000 wafers per month.    "The close proximity of the R&D center to the fabs will allow for the seamless integration of advanced process technologies from the R&D phase to manufacturing, such as the company's 45- nanometer process technology that was recently used to fabricate working SRAM [static random access memory] chips," says Dr. Jackson Hu, chairman and CEO of UMC.

by MARK AREND mark.arend bounce@conway.com

C

hina may be the biggest game in town, but it's not the only one when scouting out an Asian location. In fact, labor- cost advantages are increasingly hard to come by in China's heavily populated metros along the coast. Labor advantages remain in the hinterland, but heightened logistics costs can easily negate that benefit. Right on cue, markets like Vietnam and Thailand are emerging as more- than- viable alternatives.
   "In the auto industry, labor rates are actually higher in China for foreign companies than Thailand if you take into account mandated benefits like housing that need to be paid to the Chinese government," says David N. LaForest, managing director of TRW Fuji Serina Co., an engine components joint venture near Bangkok owned by the global TRW Automotive group based in Michigan. "But Thailand is not just a low- cost country, it's a leading competitive country because you get low costs together with a dedicated, loyal workforce that is enthusiastic to learn new things and that cooperates very well with the company." TRW's Thai engine valve plant will export more than 50 percent of its production after tripling capacity during the next 18 months to supply a Big Three US customer and other clients in America, Europe and Asia. LaForest says he enjoyed the time he spent working in China, but he still prefers Thailand: "It's not a hardship posting. I've been very happy here."
   Top- grade infrastructure near Bangkok includes the new Suvarnabhumi Aiport and Laem Chabang Sea Port, now doubling capacity. Both are close to TRW's location at Amata Nakorn industrial estate, which LaForest chose after two years of shopping. "Location, infrastructure and management sold us on Amata. Their people are as attentive to us as to much larger customers, and they really care about the environment."
   Among the 450 other manufacturers at

Bangkok's Suvarnabhumi International Airport opened in late September 2006. Its 6- million- sq.- ft. (563,000- sq.- m.) terminal building is the largest in the world. With the capacity to move 6 million tons of freight per year, the airport is a new contender for the role of primary cargo hub in Southeast Asia. Suvarnabhumi is located in Thailand's Eastern Seaboard Region, just 15.5 miles (25 km.) east of Bangkok. The region is home to significant new logistics and infrastructure investment, which is attracting industrial investors' attention.

Amata Nakorn are big names like Sony, Pepsi- Cola and Colgate- Palmolive as well as smaller firms in electronics, cars and consumer goods. The estate has some 2,400 hectares (5,930 acres). Just 20 minutes away in Rayong province, Amata operates a second site called Amata City, with 1,353 hectares (3,343 acres). It hosts 120 plants, including carmakers like BMW, says Amata president Thomas Reese.
   In Vietnam, booming foreign direct investment has helped the economy grow faster than 7 percent annually in recent years. FDI grew from US$4.5 billion in 2004 to more than $6 billion in 2005. "For the past 10 years, foreign and local investors have looked forward to Vietnam fulfilling its high potential," says Dr. Huynh Ngoc Phien, president of Amata Vietnam industrial estates. "Now it is really happening thanks to infrastructure upgrades as well as legal and regulatory reforms." Amata operates a 700- hectare (1,730 acre) site near Ho Chi Minh City in southern Vietnam hosting 90 companies.
   Phien cites anecdotal evidence that Vietnam competes well with China: "Korean Chamber of Commerce officials tell me that among member companies investing overseas, some 60 percent of their projects in Vietnam are profitable compared to just 10 percent in China."

BPO PROVIDER TO TRIPLE PHILIPPINES PAYROLL. More than 1,000 employees began work in December 2006 at Sutherland Global Services' third business- process- outsourcing (BPO) facility in the Philippines. Sutherland already employed 1,000 people at two facilities in Manila; it plans to hire 1,000 more in the next year. Gloria Arroyo, president of the Philippines, attended the inauguration in the Clark Special Economic Zone, which is the site of a former U.S. Air Force Base. Also on hand at the inauguration was Sutherland's chairman and CEO, Dilip R. Vellodi.    "The Philippines continues to exceed our expectations as a world- class BPO delivery destination, offering advantages of high- value solutions at competitive costs for our global clients," Vellodi noted. Sutherland provides back- office processing, account management, customer care and other services for multinational corporations.