India Maps Chip Strategy, Continues Talks With Intel

BANGALORE, India — India is fashioning chip-making strategy that draws on Asian and European models but will seek to leverage its strengths in other electronics sectors.

The government is also working on a policy to encourage electronics manufacturing here, especially semiconductors, displays, hard-disk drives and DVDs, said Dayanidhi Maran, federal minister for communications and information technology.

The ministry continues to talk with Intel Corp., which plans to establish a test facility here. Ministry officials are meeting Intel executives next week to discuss the company's manufacturing plans, Maran said.

Other unidentified companies have also approached the government about their interest in setting up a fab here, he said. Others, such as Siemens, plan to manufacture electronics in India.

India’s proposed semiconductor manufacturing complex, FabCity, will be located in Hyderabad, where Indian officials said the infrastructure can best support chip making. The $3 billion facility proposed by SemIndia, Inc. (Palo Alto, Calif.), which will partner with AMD, will be located within the FabCity complex, Maran said.

SemIndia has lined up $1 billion in investments for the project's first phase. The government may also invest in the project. "The government is now studying a proposal from SemIndia on what it can do for the project,” Maran added, hinting that a public-private initiative is likely.

SemIndia President and CEO Vinod Agarwal declined to elaborate on the company’s plans or Maran’s statements.