It’s finally official. What the fledgling semiconductor industry had been speculating about so far is in the public domain, that is.
NEW DELHI/ HYDERABAD: It’s finally official. What the fledgling semiconductor industry had been speculating about so far is in the public domain, that is.
Mukesh Ambani’s Reliance Industries (RIL) has proposed to invest around Rs 30,000 crore over 10 years in setting up two plants for semiconductor fabrication and manufacturing solar grade wafers and polysilicon etc.
Union communications minister Andimuthu Raja said in Delhi on Thursday that the RIL proposals are among the seven applications received for establishing semiconductor fab facilities. The government had announced the guidelines for the seminconductor policy in September 2007.
The total investment expected from the seven proposed facilities for setting up solar fabs is to the tune of Rs 65,000 crore.
Besides RIL, the other proposals are from Videocon, Moser Baer, Titan Energy System, KSK Energy Ventures Pvt Ltd and Signet Solar.
“It is an extremely exciting development as we needed a big player like Reliance was needed in the chip manufacturing space while the smaller assembly, test, marking and packaging (ATMP), and solar photovoltaic segment, which is less complex is well set,” said India Semiconductor Association (ISA) president Poornima Shenoi.
There are at least two other players, SemIndia and Hindustan Semiconductor Manufacturing Corp, two NRI promoted companies, that have been talking about setting up computer chip making fabs in the country.
In fact SemIndia is one of the co-promoers of the ambitious FabCity complex in Hyderabad where it intends to set up its fab. HSMC has not decided on the location of its facility.
RIL, too, is yet to decide the location for its semiconductor fab that will be set up at an estimated outlay of Rs 18,521 crore. The choice is between Navi Mumbai, Hyderabad, Mysore and Haryana.
The final decision on the location would be taken based on RIL’s negotiations with the state governments on incentives, it is learnt.
Interestingly, despite the hype around them, both SemIndia and HSMC have not yet submitted their final proposals for the semiconductor fabs to the government till now, an industry source said.
Therefore RIL’s is the only formal proposal that is before the government for a semiconductor fab for computer chips which means it has achieved a financial closure of sorts while the other two are still struggling to find investors.
Word is that the company will settle for Infineon for technical partnership for the computer chip making unit.
Most significantly, according to sources the former AMD India President Ajay Marathe, who had joined SemIndia as its chief operating officer, quit the company last June and is now heading the Reliance Semiconductor initiative.
It is a major blow for SemIndia which is struggling to find investors. More interestingly, once again according to industry sources SemIndia promoter Vinod Agarwal himself is mulling setting up a SPV unit at the FabCity.
RIL’s second proposed plant, at an expected cost of Rs 11,631 crore, would be set up at Jamnagar in Gujarat, once it gets the government clearance. This plant would manufacture polysilicon, single crystal/multi-crystalline ingots, solar grade wafers, SPV modules with a capacity of 1 giga watt.
RIL has sought a subsidy of Rs 3,394.56 crore from the government for its first semiconductor plant, and Rs 2,326.20 crore for the second one.
The two RIL plants are likely to generate around 15,000 skilled and unskilled jobs, according to a statement issued by the Department of Information Technology.
According to an RIL spokesperson, “the group is currently evaluating an investment in an integrated semi-conductor facility”.
The spokesperson added that the group will make necessary announcements when the plans are final. Meanwhile, sources said that international tieups with RIL cannot be ruled out for setting up the semiconductor facilites. It is learnt that the group has been keen on the project for quite some time now, but has submitted its proposals to the government only recently.
According to industry sources the project should take between two to two and half years to kick off commercial production.
Among others, Videocon wants to set up an LCD Fab facility in Navi Mumbai at an investment of Rs 8,000 crore. It has sought a subsidy of about Rs 2,000 crore. The company expects to roll out next year.
Moser Baer PV technologies India Ltd has proposed to invest Rs 6,000 crore for a silicon cells facility at Oragadam near Chennai. It has sought a subsidy of Rs 2,393 crore.
Titan Energy System Ltd has chosen Hyderabad as the location for its proposed solar cells and solar grade semiconductor facility at a project cost of Rs 5,880 crore. It has sought a subsidy of Rs 200 crore in the fourth year and Rs 296 crore in the seventh.
KSK Energy Ventures Pvt Ltd wants to set up its integrated solar panel semiconductor facility at Maheshwaram Mandal near Hyderabad at a cost of Rs 3,211 crore. It has sought a subsidy of Rs 642 crore.
Signet Solar has submitted its proposal to set up a solar PV facility at Sriperumbudur (Tamil Nadu) for an investment of Rs 9,672 crore. The company has sought an investment of Rs 1,934.40 crore.
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