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Government’s efforts to set up Silicon wafer fab units could bear fruit

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There is finally headway in government’s efforts to set up semiconductor wafer fabrication units. At least five global semiconductor makers have expressed interest in supporting the project in some way or the other. These include Infineon Technologies, ST Microelectronics, Russian major Sitronics, GlobalFoundries and a consortium comprising Jaypee Associates, IBM and Israeli firm Tower Jazz.

According to Department of Electronics and IT (DEITY) sources, feelers had also been sent to other technology firms, including Taiwan Semiconductor Manufacturing Company (TSMC), Intel and Freescale. GlobalFoundries (earlier part of AMD) has indicated that it can offer know-how for 200 nm technology and also consultancy on process intellectual property.

The empowered committee, set up by the DEITY to monitor the progress of the project, has selected consultancy firm Accenture to make a detailed business proposal to enable the semiconductor firms take a final decision on investing in the project. PricewaterhouseCoopers had also submitted its bid but lost out on pricing. Accenture quoted Rs 38 lakh for the contract compared with PwC’s Rs 79 lakh.

Once semiconductor fabrication is being done in India, it will pave way for local manufacture of electronic items. The Government wants to have at least two semiconductor wafer fabs in the country, for which it has been scouting for companies that can offer technology and investment.

DEITY is also said to be exploring the possibility of partnerships between multinational technology firms and Indian public sector units like BEL and BHEL. But the actual investments from these companies will come only after the Government makes it clear on how it plans to support the projects financially. All the countries where fabs have been set up have offered fiscal incentives to the investors.

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