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India plans $5 billion fab construction

Hoping to revive its manufacturing efforts, India recently unfolded a new blueprint for the construction of two local wafer facilities. The government has proposed the establishment of a committee to identify technologies and investors to lead the effort. Among others, the committee would include an adviser to the prime minister on technology issues, the chairman of the National Manufacturing Competitiveness Council and M.J. Zarabi, former chairman of India's Semiconductor Complex.

Semiconductor Manufacturing Along with identifying technologies and potential investors, the committee will recommend the level of government support for the fab project and the mix of grants and subsidies. The panel's recommendations will be delivered by July 31.
Key goals of the fab effort include developing policies for encouraging access to Indian-made electronic products along with the creation of an Electronic Development Fund. The fund would provide grant money to build electronic manufacturing clusters.
The government said the fab initiative also will seek to develop "localized content [and] value addition." Construction of the two fabs is expected to cost about $5 billion. The amount of government financial support must still be negotiated.
"The wafer fabs will have catalytic impact on development of downstream and upstream products," according to a government statement. "It would have sizable impact on the development of IC design software, solutions and services. It will also bootstrap innovation and R&D."
The fab initiative is the latest in a series of efforts designed to build up an Indian electronic hardware industry. Previous efforts have failed to produce tangible results, partly as a result of an ongoing debate over whether India needs a domestic chip industry.
Earlier government proposals to provide financial incentives to build wafer fabs have languished. It remains to be seen whether the latest effort will fare any better.
The Indian government estimates that the creation of a chipmaking industry within India will help create 30 million direct and indirect jobs by 2020.

However, India has been here before and failed to attract any chip manufacturers to set up shop. In the middle part of the last decade a group of Silicon Valley-based Indian expatriates created SemIndiabefore transforming that company into a supplier of communications equipment. Hindustan Semiconductor Manufacturing Corp. selected Infineon Technologies AG as a partner to help it put down two fabs in Fab City industrial park near Hyderabad in the state of Andhra Pradesh.
Neither SemIndia nor HSMC has put down wafer fabs and the government-backed Fab City has drifted toward a focus on solar energy. It was not discussed whether Fab City would still be a preferred location for the creation of a chip manufacturing facility under the renewed plan.

Source: April 27, 2011, EE Times