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Report: Intel Again Looks To Set Up Test Plant In India

Semiconductor supplier Intel Corp. has revived its earlier plan to set up a $700 million wafer testing facility in the country, but has asked for additional incentives to do so, according to a report in the Business Standard from New Delhi.

K.C. Krishnadas

January 12, 2006

2 Min Read

BANGALORE, India — Semiconductor supplier Intel Corp. has revived its earlier plan to set up a $700 million wafer testing facility in the country, but has asked for additional incentives to do so, according to a report in Business Standard from New Delhi Thursday (Jan. 12).

The report said Intel, which appeared to have dropped its plan floated last year to set up a test facility, has met Indian government officials seeking free land for the facility and various income and dividend tax exemptions for 15 years. It has also sought an unsecured loan of $45 million.

A senior executive team from Intel lead by Frank Jones, head of its Indian operations, has met with the country’s finance minister P. Chidambaram and the minister for communications and information technology, Dayanidhi Maran, in New Delhi and outlined new demands to set up the plant.

The government has set up a high-level team to examine the demands and consider which of these could be offered to Intel. On its part, the company is reported to have assured the government that it was ready to start due diligence on the proposed project. Intel will decide by the end of March and if so, will start work on building the facility immediately after.

Intel has stepped up its commitment to India. Last December, the company reportedly said it would invest $1 billion in the country. However, the company has wavered on its plans to set up a test plant there.

Late last year, India had told the Indian government that it was putting its Indian hardware plans on hold since it was denied the concessions it had sought at that time. Among the demands then were for the Indian government to give it a grant of $100 million. Intel had decided to build a facility in Israel instead of India, according to reports.

The report said that during the recent meeting, the ministers repeated their suggestion to Intel to set up a full-fledged semiconductor plant in India.

During the launch earlier this week of the Centrino Duo mobile processor in India, minister Maran reiterated a pitch to Intel to consider India as a manufacturing destination and assured it that the government will go ‘the extra mile’ if Intel plans to manufacture semiconductors here.

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