Hyderabad:
The AP government and SemIndia have announced the setting
up of a $3-billion (Rs 13,500 crore) project to manufacture
semiconductors used in computers, mobile phones and other
digital devices at a 1,200-acre site near the upcoming
Hyderabad international airport, 40km from the city.
Two
other semi conductors makers Nano Tech and Cypress Semiconductor
have evinced interest in locating their bases in the FabCity
and negotiations are on to woo some more semiconductor
companies.
Chennai,
Bangalore and Hyderabad, have been hotly pursuing the
project. While work on the first phase of the SemIndia
project, at an investment of $1 billion, would begin next
month, the second phase would have an overall investment
of $2 billion. However, within months an Assembly Test
Mark Pack Plant used by chipmaker and Intel's main rival
AMD (Advanced Micro Devices) will be set up. AMD is SemIndia's
technology partner.
State
chief minister Dr Y S Rajashekhara Reddy, SemIndia chairman
Vinod K. Agarwal, STPI director B V Naidu, and venture
capitalist Pratap Kondumuri, said this was one the largest
investments ever made in the country in the technology
sector and would have the potential for a spin-off effect
of drawing more companies.
Government
officials said this is as a first step towards India becoming
a $33.6-billion semiconductor market employing about 36
lakh people by the year 2015, as projected by consultants
Frost & Sullivan.
Though
the officials did not divulge the exact details of the
equity structure, the project may have 50 per cent equity
from promoters and strategic partners and 50 per cent
debt component. Given its capital-intensive nature, the
investment by strategic partners would be crucial. SemIndia
also expects to support Broadcomm's chip requirements.
Dr
Agarwal said STPI had discussed the project with the three
southern states and while TN had shown little enthusiasm
for it, Karnataka and Andhra Pradesh had hotly contested
to have the project located in their respective states.
He said the support from Dr Reddy and his team, and from
union minister for IT and communication Dayanidhi Maran
had clinched the deal in favour of AP.
Maran
told reporters that the Andhra Pradesh government had
promised to provide subsidy, power and water, besides
making available 1,200 acres of land required for the
project. He added that the AP government had even promised
accommodation to key officials at the posh Jubilee Hills
area in Hyderabad. As the project required a huge quantum
of water for the reverse osmosis and water treatment plants,
the state government has promised them enough water.
Maran said the Fab City project has the capacity to provide
employment to over 15 lakh people by 2015. But this talent
pool has to become available. He said the Indian Semiconductor
Association should come forward to provide this skilled
workforce which the project will need in its second phase.
He
said that though India was a late starter in the semi
conductor race it would catch up soon as the coming years
would be crucial for the Indian semiconductor industry
as a lot of foreign majors were entering India, promising
huge investment over the next couple of years.
"AMD has already agreed to come in and is transferring
the microprocessor technology to SemIndia. Nokia has agreed
to set up a manufacturing plant in Chennai. Even Motorola
and Siemens are
coming in," Maran added. The centre as well as state
governments need to wake up to these calls in a proactive
manner, he added.
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