SemIndia Chips To Roll Out In A Year, Report Says

BANGALORE, India — With the first batch of chips from SemIndia Inc.'s fab in Hyderabad scheduled to come off the production line in less than a year, the facility has already procured an order worth about $400 million, according to a Thursday (Oct. 19) report by Cybermedia News.

Quoting Bob Kondamoori, managing director of India-specific venture capital fund Sandalwood Partners, the report said the venture fund will put in $10 million for setting up an assembly-test-marking-packaging (ATMP) plant at SemIndia. Flextronics will invest $10 million in the ATMP plant, while the promoter will chip in with the remaining equity component of $10 million, according to the report. Debt of $70 million will be raised from Indian banks for the plant, according to the report.

The biggest order bagged so far is from Advanced Micro Devices Inc., the report said. AMD had earlier agreed to transfer technology to the $3 billion wafer fabrication facility, the first of its kind to be announced in India.

However, with work having started only on the ATMP plant and not on the wafer fab, it remains to be seen if the June 2007 rollout of chips can be met. The promoters of the project, as well as other potential wafer fab promoters in India, are still awaiting a national semiconductor policy, supposed to have been announced in May.

Sources said the policy has been held up because the federal finance ministry is unconvinced of the benefits accruing from fabs, especially when fab promoters want the government to take as much as up to 25 percent equity in the projects.