Fabs in India bank on $1.5B state fund

By agencies   |   Tuesday, 07 February 2006, 20:30 IST
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BANGALORE: The emergence of semiconductor manufacturing plants in India will hinge on whether the federal government accepts a demand by the India Semiconductor Association (ISA) for a $1.5 billion fund. This will enable the industry body to pick up equity in upcoming Fab projects. The association has sent a proposal to the Planning Commission asking that a dedicated fund be set up to expressly encourage semiconductor manufacturing in India, according to a report. As much as 25 percent of the equity component of each Fab project would be financed through the new fund, the ISA said. Commenting on this, ISA’s Chairman, Rajendra Kumar Khare said, “Without these funds, even those fabrication units that have already been announced will not be set up.” One of the major fab projects announced recently was the SemIndia proposal, a $3 billion fab to be built with Advanced Micro Devices Inc. agreeing to provide the technology. Work on one fab has started in the southern Indian state of Andhra Pradesh. According to the reports, a Korean firm have expressed interest in setting up a fabrication plant in India but only if the government creates the fund. With the fund in place, several new fabrication facilities would emerge, Khare said, adding that the country also needs a national policy on semiconductor manufacturing. He said, “The government is in the process of drafting a national policy on semiconductor facilities, and the proposed policy is likely to be broadly based on those in Taiwan and China.”