Hindustan Semiconductor to set up first fab in India

By SiliconIndia   |   Wednesday, 28 March 2007, 05:00 Hrs
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NEW DELHI: India's Hindustan Semiconductor Manufacturing Corp plans to build two chip-making plants for up to $4.5 billion using technology from German chipmaker Infineon Technologies AG, the Indian company said.

The German firm Infineon will not have any equity interest in the Indian company. "We think it is not a very good idea for a semi conductor manufacturer to have shareholding in foundry," Wolfgang Ziebart, Chief Executive of Infineon said.

India had recently announced incentives to boost investments in the semiconductor industry. For units in special economic zones (SEZ) the government will give incentives equal to 20 per cent of the capital expenditure during the first 10 years of the project.

The incentive will be equal to 25 per cent of capital expenditure for units in other areas. "The first fab will require an investment of $1 billion and will produce chips on 8 inch wafers. The second one will be far more advanced. 12 inch wafer requiring an investment of $3.2-$3.5 billion," Hindustan Semiconductor and Infineon said in a joint statement.

The memorandum of understanding will help build a foundation for the production of integrated circuits for mobile phones, ID cards and automotives in India, it said.

India's demand for semiconductors is projected to reach $36 billion by 2015, riding a boom in electronic goods manufactured in India, the statement quoted Communication and Information Technology Minister Dayanidhi Maran as saying.

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