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Centre will woo Intel again on chip fab

Thursday, 22 March 2007 - 9:48pm IST

The lack of a semiconductor policy in India had forced the world’s biggest chipmaker to shift consider Vietnam instead some time back.

NEW DELHI/HYDERABAD: With the semiconductor policy finally getting notified, the Union minister for Information Technology, Dayanidhi Maran, has said he will revive talks to get Intel to consider India once again for a manufacturing facility.

The lack of a semiconductor policy in India had forced the world’s biggest chipmaker to shift consider Vietnam instead some time back.

“We expect that with the semiconductor policy in place, we would be able to attract investment worth Rs 24,000 crore or even more in this sector in the next two-three years,” Maran declared. By March 31, 2010, India will house two-three semi-conductor fabs each with an investment of $2billion-$3billion.

Some of the biggest names in the industry are already making a beeline for India. The semiconductor policy came into effect from March 21, 2007, the minister said, adding that the Department of Information Technology (DIT) would soon be setting up an appraisal committee for the evaluation of the semi-conductor projects trying to set up shop in India. The committee, to be responsible for verifying the projects and forwarding recommendations for approval from the government of India, would be headed by additional secretary in DIT.

The other members of the committee would consist of senior officials from the department of commerce and finance and technology experts as well. The incentives for the semiconductor industry were announced almost a month back. But the DIT is likely to put the details of the semiconductor policy in the public domain only tonight.

The government on February 22 announced that 25% direct subsidy of the capital expenditure can be availed of by semiconductor manufacturers located outside SEZs with no countervailing duty on capital goods and 20% subsidy can be availed by those located within SEZs. For semiconductor manufacturing, the minimum investment for availing the incentives has been pegged at Rs 2,500 crore, while the threshold for other products like liquid crystal displays(LCDs), organic emitting diodes, plasma display panels, storage devices, photovoltaics and other advanced micro and nano technology products and assembly and testing is Rs 1,000 crore.

It has been indicated that the subsidy will be in a combination of tax concessions, interest subsidy and interest free loans. The plants will be able to enjoy the tax benefits until March 31, 2010, the minister said.

The first of the chip-plants to come up in the country is likely to be SemIndia Inc’s $3 billion fab project in Hyderabad. The factory will make chips using 65 nanometer and 90 nanometer technology.

“The notification of the policy opens up a new era in India’s semiconductor quest,” said B V Naidu, managing director, SemIndia Fab City which will house up to eight units. The Fab City has received proposals from four companies to set up units within the complex apart from a gases plant by Linde BOC, Naidu said.

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