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India renews efforts to create chip manufacture industry

Posted: 27 Apr 2011     Print Version  Bookmark and Share

Keywords:India wafer fab  India chip manufacture  fab technology  India fab investment 

Determined to establish an IC manufacturing industry in the country, the Indian government has resuscitated plans to build two wafer facilities at a cost of about Rs.22,831.05 crore ($5 billion) and in the process attract potential investors.

The exact level of government support for the plan would be finalized by way of negotiations with interested parties. This will happen after a report has been produced by the newly-formed Empowered Committee for identifying technology and investors for Semiconductor Wafer Fabrication (Fab) Manufacturing Facilities, the Indian government said in a statement.

The Empowered Committee is composed mainly of political appointments but is expected to co-opt industry experts and is due to report back to government by July 31, 2011.

The committee has been chartered with identifying the sources of technology and potential investors for the establishment of at least two wafer fabs and to recommend the nature and size of government support. This could be in the form of an equity position, grants and financial support.

The Indian government argues in its statement that the lack of domestic chip manufacture and reliance on chips made overseas are serving as a bottleneck on the development of complete electronic systems within India. The argument continues that the creation of wafer fabs would have a "catalytic impact on the development of downstream and upstream products." The government estimates that the creation of a chip manufacture industry within India will help create 3 crore direct and indirect jobs by 2020.

However, India has been here before and failed to attract any chip manufacturers to set up shop. In the middle part of the last decade a group of Silicon Valley-based Indian expatriates created SemIndia before transforming that company into a supplier of communications equipment. Hindustan Semiconductor Manufacturing Corp. selected Infineon Technologies AG as a partner to help it put down two fabs in Fab City industrial park near Hyderabad in the state of Andhra Pradesh.

Neither SemIndia nor HSMC has put down wafer fabs and the government-backed Fab City has drifted towards a focus on solar energy. It was not discussed whether Fab City would still be a preferred location for the creation of chip manufacturing under the renewed plan.

- Peter Clarke
  EE Times

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