Intel has dramatically expanded its investment plans for Vietnam, increasing planned investment in a test and assembly plant from $300m to $1bn (from about £160m to £520m), the company said on Friday.

The expanded investment will increase the size of the Vietnam plant from 150,000 square feet to 500,000 square feet, making it the largest such facility owned by Intel. The plant, to be constructed near Ho Chi Minh City, will begin operation in 2009 and employ up to 4,000 workers.

Construction on the plant will start in March 2007.

Intel decided to increase its investment in the Vietnam plant, first announced in February, after determining that the larger size would allow the plant to operate more efficiently, it said. The larger plant will serve as a model for future test and assembly facilities, and will boost Intel's long-term efficiency, the firm added.

The plant in Ho Chi Minh City will be Intel's seventh such factory. The company currently has plants in Malaysia, the Philippines, China and Costa Rica.