Two Semiconductor Fab Units Await Final Approval

The government has approved two consortiums to set up chip fabrication units in the country. First consortium is led by Jaypee Group that has drafted International Business Machines Corp. (IBM) as its technology partner, while the other is led by chip-maker Hindustan Semiconductor Manufacturing Corp. (HSMC), which has partnered with Geneva-based STMicroelectronics NV. The government had received close to 13 proposals, out of which only two have qualified.

"Two fab units in the country are a very good beginning to tread the path of chip manufacturing in India. It will help India to catch up in the lost race for electronics manufacturing," says PVG Menon, president, Indian Electronics and Semiconductors Association. "The IESA has already welcomed the 0% customs duty for import of equipment for the fab, which will trigger the industry. This will help in improving the viability of the project for the investors."

The companies in line are tight-lipped on the matter. The National Policy on Electronics and the budget have given a number of measures to boost the electronics manufacturing in the country.

Menon also clarified on the doubts that have gone viral in the industry that it is not a good move for India to set up fabs for 64 nm (nano meter) or above wafers. According to a few camps, India should have rather focused on 28 nm. "It is important to understand that the bulk is going to 64 and above wafers. And India needs to focus on the bulk right now," argues Menon.