The Hindu Business Line : Fab policy to hasten cos' India investment plans

Among the main projects waiting in the wings include the $3-billion SemIndia project in Hyderabad that proposes 200-mm and 300-mm wafer fabrication facilities based on technology from Advanced Micro Devices (AMD) and an assembly, test, marking and packaging plant.

Global microprocessor giant Intel has also said it is open to the idea of setting up an Advanced Testing and Manufacturing (ATM) unit in India and was awaiting the Government's semiconductor policy.

Taiwanese companies are also interested in setting up base in India. Senior Government officials said that the policy would attract investments in photovoltaics, LCD panels and semiconductor too giving a leg up to consumer electronics industry in the country, which is the fastest growing in the world.

Fillip for handset facility

With a number of telecom equipment manufacturers announcing plans to set up units in India, the new policy will also give a fillip to the local production of cheaper mobile handsets.

The policy has seen delays due to a stalemate between the Finance and IT ministries on the issue of the fiscal incentive package for investors setting up fab units. The electronic consumption was projected to touch $350 billion by 2015 and the country would need to import more than $40 billion semiconductor components by then. India will account for 11 per cent of the global electronics market by 2015, compared to 1.8 per cent in 2005.

The new policy aims to translate that demand into local manufacturing apart from generating more employment in the country.

However, analysts such as Gartner predict that global fab majors will stay away from India in 2007. Instead, global fab vendors will look at India more aggressively for its design prowess, as per Gartner, which expects fab companies to initially set up semiconductor assembly and test (SAT) units.