Five firms seek government nod for setting up chip fabrication units

Mumbai: A year after India announced a semiconductor policy, five companies, including Moser Baer Ltd and Videocon group, have sought government permission for setting up semiconductor fabrication units, government sources said on Tuesday.

The government, however, has not received any formal applications to set up chip making, or fabrication units.

Two companies, SemIndia Systems Pvt. Ltd and Hindustan Semiconductor Manufacturing Corp. (HSMC), have made public announcements about their fabrication units but are yet to apply to the government for permission to set up the same.

The policy has resulted in investments or proposals for investments of around Rs40,000 crore, but this does not include any for chip making plants, said M. Madhavan Nambiar, special secretary, ministry of communications and IT.

"A formal proposal to set up chip fab unit with a Rs25 lakh fee (that needs to be sent along with the application as an indication of seriousness) hasn't yet come to us, but we expect some announcements in the next two months," Nambiar added on the sidelines of the third annual event of industry body Indian Semiconductor Association (ISA).

The first made-in-India chip, however, is unlikely to hit the market before 2010. SemIndia and HSMC have said they will invest $3 billion (Rs12,030 crore) and $1 billion, respectively, in their fab units.

On an average, a fab rolls out its first chip two years after the beginning of construction of the plant.