The Hindu Business Line : Fab City project attracts 7 firms, $7 b investments

The Union Minister of State for Commerce, Mr Jairam Ramesh (right), and ISA Chairman, Mr S. Janakiraman, at the Vision Summit 2008 organised by the Indian Semi Conductors Association in Bangalore on Monday. —

M. Ramesh

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Bangalore, Feb. 18 The semiconductor policy that was announced by the Government about four months ago has attracted tremendous response, the Union Minister of State for Commerce and Industry, Mr Jairam Ramesh, said on Monday. Under the policy, the Government will basically provide equity support to the investing companies.

Delivering the inaugural address at the ‘ISA Vision Summit’ — the annual conference of the Indian Semiconductors Association (ISA), Mr Ramesh said that seven companies have confirmed investments under the policy in the Fab City project at Hyderabad. Together, they have committed to put in $7 billion (Rs 28,000 crore), which will be made over the next ten years.

Andhra Pradesh has earmarked 1,500 acres for Fab City, to house more than 10 units that would be involved in fabrication of semiconductor chips, assembly and testing operations.

Five more companies have been given in-principle approval for setting up plants at the Fab City. Their proposed investments add up to $800 million (Rs 3,200 crore).

In the list

The seven companies that have confirmed investments are: SemIndia ($3 b), Solar Semiconductor ($1 b), Titan Energy ($750 m), Nanotech Silicon India ($2 b), XL Telecom and Energy ($75 m), KSK Energy Ventures ($70 m) and Embedded IT Solutions ($5 m). All these companies have been allotted land and most have commenced preparatory work for their projects, Mr Ramesh said.

The five companies that have received in-principle approval are: Chandradeep Solar, Neotech Solutions, Photon Energy Systems, Surana Ventures and Ram Terra Solar.

Further, project proposals of three more companies are under “active consideration” of the Government. These are Videocon ($250 m), Moser Baer ($2 b) and Hindustan Semiconductor Manufacturing Corporation ($1 b).

‘Remarkable bonanza’

Expressing happiness over the encouraging response to the semiconductor policy, Mr Ramesh hoped that this “remarkable bonanza” was not “just exuberance”.

Observing that the demand for semiconductors came from both ‘private’ and ‘public’ spends, the minister pointed out that the ‘private’ demand came from the explosive growth of the mobile telecommunications industry, personal computers, and the automotive industry.

Each month, 7 million mobile subscribers are added to the telecom companies’ customer base, he noted. Similarly, last year 7.25 million personal computers were sold in India.

‘Public’ demand came mostly from Government-run projects such as e-governance, smart ID cards and solar energy.

Calling for the industry’s involvement in meeting this ‘public’ demand, Mr Ramesh urged the industry to be competitive. “We cannot crib about low-cost competition from China and Taiwan and try to be behind protective walls,” he said.

Earlier, Mr Azim Premji, Chairman, Wipro, delivered the keynote address on the theme ‘Evolving Domestic Market: Growth Driver for the Indian Electronics Industry’, in which he spoke of the huge potential for the electronics industry. He called for increased localisation.

India-made product

In reply to a query on when India will be able to produce a world product like the iPoD, Mr Premji said that in the last 15-odd years, there had been so much of ‘low hanging fruit’ in providing services that the industry did not focus on developing a product.

He said he did not foresee an India-made product for the world for many years to come. Mr Jairam Ramesh, who spoke after Mr Premji, noted that much of the software for the iPoD was written in Hyderabad.

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