The Hindu Business Line : SemIndia awaiting Govt move for expansion

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Hyderabad Feb. 5 The promoters and strategic investors in SemIndia project are awaiting the Union Government policy framework to finalise the nature of equity participation.

Speaking on the sidelines of Vision Summit, the CEO of SemIndia, Dr Vinod Agarwal, said that the policy and the equity participation of up to 25-26 per cent by the UnionGovernment would make the project financially viable. This would then help others to pitch in.

An early decision would help expedite the second phase of the project.

Not just SemIndia, some other investors in the sector too, are awaiting the policy on semiconductor industry. The Cabinet had cleared in-principle the policy for the semiconductor industry and this might be announced shortly it was indicated.

Referring to the phase I of the project taken up with $ 100 million in investment, Dr Agarwal said that this would be ready within 13 months.

Govt support vital

Citing semiconductor projects, SemIndia official said that Government support is crucial for the success of semiconductor units. For instance, Intel had secured support of about $ 580 million in Israel.

The project is power and water intensive and requires a back up of 50 mw of power. The promoters are in parleys with the State for dedicated power.

Asked what percentage of stake the US company, AMD, would take in SemIndia, Dr Agarwal said it depended on how much stake the government would take in the company. Asked what might be the maximum stake that AMD was willing to take in SemIndia, Dr Agarwal said that it was "a matter of negotiation."

He also did not want to answer a question on the customers who had committed to place assembly, test and packaging services on SemIndia, on the grounds that such information was confidential.

SemIndia's vision

Earlier, speaking at the annual conference of the India Semiconductor Association, Mr Ajay Marathe, Chief Operating Officer, SemIndia, gave a broad idea of what the company intended to do in India.

Working towards the goal of becoming India's leading integrated semiconductor industry, SemIndia would create "the entire semiconductor manufacturing eco-system" or `silicon-to-end', Mr Marathe said. India would also manufacture in India the silicon that goes into the chips, he said.

Further, the company intended to reach a large section of rural population too, through tie-ups with regional brands. In the rural areas "nobody knows Nokia or Motorola, but they know and trust the co-operative shop in the town," he said, adding that SemIndia would leverage the brands of such local outfits to reach out to rural people.

Without naming any products that the company would produce, Mr Marathe said, "SemIndia will be the technology provider to a large number of people."