India to have a $3 billion chip making plant [ Thursday, December 01, 2005 01:07:53 amTIMES NEWS NETWORK ]
Joint Sector Firm SemIndia Will Set Up The Facility With Technology
>From America's AMD.
NEW DELHI: Finally, India will have a semiconductor chip manufacturing facility of its own to cater to the fast growing market for PCs, cellphones, set-top boxes and a range of consumer devices.
The chip fabricating plant (Fab) will cost $3 billion (about Rs 13,800 crore) and will be ready for production in a couple of years, communications minister Dayanidhi Maran said on Wednesday.
The project will be lead by a little known public-private-partnership (PPP) consortium called SemIndia and involve the centre, a state government (depending site finalised) and private investors as equity partners.
The chip technology and production processes will come from AMD that competes with the world leader Intel.It is not clear yet how much equity each partner, including AMD, will hold in the consortium.
AMD chairman Hector Ruiz signed MoU with SemIndia for the project and said that the Fab would be a historic milestone for manufacturing in India. The agreement will enable SemIndia to licence AMD technology and also jointly develop and market semiconductor chips in India.
Maran said details like equity structure, project site and production plans were being finalised and would be announced over the next few months. "Typically, it takes 2-3 years to set up a Fab (chip fabricating plant)," said SemIndia chairman Vinod Agarwal.
"We are partnering with world-class suppliers and customers to create this Fab." Agarwal said the chips would find immediate market in India, and some would be exported.
He said that within a few years India could have a full Fab City that would be a unique 'island of infrastructure and logistics', employing millions of people eventually.
SemIndia estimates that by 2015, India would spend $30 billion a year on chips, and the consortium would be able to take 30-40% of this market.
If chip making takes off in India with this project, it would add to the strong brand the country has in software, services and BPO sectors.
So far, manufacturing is believed to be the reserve of China. For long, India has tried to persuade Intel to set up a Fab here, but it has been slow to respond.
Mostly, Intel has blamed poor infrastructure especially power, roads and airports and a host of other things to keep off India. Intel is believed to have put forward some demands to the government to ensure that its investments are not jeopardised, but nothing has come of it yet.
In fact, Intel's outgoing chief Craig Barrett is slated to visit India next week. It is not clear whether Barrett, who has been visiting India almost every year over the past decade, has any plans to announce a plant here.