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Infineon to license tech for integrated chips

$4.5-B INVESTMENT: The Minister for Communications and IT, Mr Dayanidhi Maran, flanked by the President & CEO, Infineon Technologies AG, Munich, Dr Wolfgang Ziebart (right), and the Founder and Chairman, Hindustan Semiconductor Manufacturing Corporation, Dr Deven Verma, after signing of the agreement between Infineon Technologies and HSMC in the Capital on Wednesday. - Ramesh Sharma

New Delhi March 28 In the backdrop of the semiconductor policy getting notified, Hindustan Semiconductor Manufacturing Corporation (HSMC) announced its plan to set up fabrication manufacturing facilities in the country at an investment of $4 billion.

This is the first announcement after the details of policy were made known last week, including the fact that the Government intended to restrict the number of semiconductor manufacturing facilities to two-three units under the special incentive package scheme.

The investment would be in association with the world's fourth largest semiconductor company, Infineon. The German company will license its technology to HSMC for the production of integrated circuits for mobile phones, ID cards and automotives for the Indian market.

HSMC plans to set up two semiconductor manufacturing facilities in the country. The company intends to invest $1 billion in its first facility that would produce chips on eight-inch wafers. However, its second one for 12-inch wafers would be at an investment of $3.2-3.5 billion. It would take two years to manufacture products at these units.

The Union Minister for Communication, Information and Technology, Mr Dayanidhi Maran, said, " We would be very fast in allowing the companies to invest. However, as mentioned earlier, we will pick only the best investment proposal."

While signing the memorandum of understanding, Mr Devendra Verma, Chairman, HSMC, said, "India's GDP is around 9 per cent and the development of semiconductor manufacturing will help propel it to grow to approximately 10-11 per cent annually."

In talks with States

He said they were talking to various States and that the company had not decided the exact location to set up the facilities.

He declined to comment on the form of incentives it would prefer to leverage under the incentive package scheme for the semiconductor and said that they were in serious discussions with many investors to raise the necessary funds.

"Infineon has technology that can make ultra low cost mobile handsets. India, being one of the market with largest ultra low cost handsets, would be able to take advantage of our technology in the coming months," said Dr Wolfgang Ziebert, President and CEO, Infineon.

Globally, the company has 30,000 employees, while its research and development centre in Bangalore currently has a base of 600 employees. With this strategic tie-up, Infineonwould not be required to invest in its own facility.

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