Updated: India again seeks help with fabs

LONDON – The so-called Empowered Committee, set up by the Indian government to get the country into chip manufacturing, has prepared an advertisement inviting potential technology providers and financial investors to make a preliminary expression of interest in setting up semiconductor wafer fabs in India.

Those interested have four weeks to send an email to fab.eoi-dit@nic.in including a profile of the investor consortium, the technology experience, the technology, product and manufacturing proposals and how much money they need and how much they intend to spend.

The advert points out that the Indian government has multi-billion dollar projects to provide 3G, WiMax and 4G access to 600,000 villages around the country and to provide 100G broadband to 20,000 colleges and research institutes.

It adds that India has a strong semiconductor design infrastructure that works on the design of nearly 2,000 chips each year and which employs more than 20,000 engineers engaged in various aspects of chip design and verification. The advert claims it that the total of VLSI design, board and systems hardware design plus embedded software development created a market that was worth $6.5 billion in 2009 and that will be worth $10.6 billion in 2012.

The advert also boasts that India possesses the third largest scientific and technical base in the world with 400 universities producing 200,000 engineering graduates every year.

The Empowered Committee, set up in April, is chartered to help set up at least two wafer fabs at a cost of about $5 billion. Along with identifying technologies and potential investors, the committee will recommend the level of government support for projects and the mix of grants and subsidies. The panel's recommendations are scheduled to be delivered to the Indian government by July 31.

Two earlier commercial initiatives, SemIndia and Hindustan Semiconductor Manufacturing Corp. failed to materialize. As yet there is no indication as to whether the Indian government has any preferred locations where it wants wafer fabs to be built.

The IT agency announced in April that it was considering two fab plans: either a new fab with established technology or acquiring an existing fab and relocating it here. It also is considering taking an equity stake in an integrated device manufacturer (IDM) that would then be prepared to set up an India facility. This would have similarities to the steps being taken by Abu Dhabi where a sovereign wealth fund has the controlling interest in Globalfoundries Inc. (Sunnyvale, Calif.).

India’s $45 billion electronics market is expected to reach $400 billion by 2020, which could translate into $50 billion in domestic chip demand.

Full foreign direct investment is allowed in Indian fabs, and the government is developing a policy that would give preference to for domestically-produced electronics procured by government agencies. Along with financial incentives, the government would help provide fab infrastructure.

The India Semiconductor Association (ISA) praised the agency’s proposal, but called for the panel reviewing proposals to provide more details. The initiative will build on previous efforts, said ISA president Poornima Shenoy.

Meanwhile, a report by the Hindustan Times said card maker Sandisk is considering whether to create an assembly unit here for digital storage products. SanDisk, which has a design center here, could not be reached for comment.

Related links and articles:

http://www.mit.gov.in/sites/upload_files/dit/files/GovtofIndiaInvitesEoIforSettingUpSemiconductorFabs_22611.pdf