ISRO to upgrade its chip unit as IBM backs out of deal

25 July 2008

Mumbai: Indian Space Research Organisation (ISRO) is planning to upgrade a semiconductor fabrication unit on its own after the short-listed vendor International Business Machines Corp (IBM) backed out citing fear of possible military use of the chips designed to guide rockets and satellites.

IBM won the Rs500 crore contract to upgrade the Semi-Conductor Laboratory (SCL), the country's oldest chip foundry, in 2006, in a bidding that pitted it against another US-based firm, Atmel Corporation.

''In all these projects, the components are all of dual-use technologies (and) many people don't agree that they can part with the technology they have,'' said ISRO chairman G Madhavan Nair, adding, ''We are going on our own now. Entire rocket technology and satellite technology we have developed ourselves. We can also develop (on our own) semiconductor technology.''

The chips produced in SCL can also be used in strategic programmes -  to guide missiles, or in other defence projects. IBM wants ISRO to guarantee that this does not happen.

IBM is subject to the export control regime of the US, which bars duel-use technology without government authorisation.

IBM's insistence of an end-user agreement comes against the backdrop of an India-born businessman, Parthasarathy Sudarshan, being jailed for selling vintage Intel chips allegedly for India's light combat Tejas programme and rocket programmes.