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India's Fab City attracts investments as focus shifts to solar

Posted: 20 Feb 2008 ?? ?Print Version ?Bookmark and Share

Keywords:India Fab City? photovoltaic? solar energy?

The India government has approved five more companies to take part in its Fab City project, increasing total investments to $7 billion.

This is according to the Minister of State for Commerce, Jairam Ramesh, who spoke Feb. 18 at the two-day India Semiconductor Association (ISA) summit. Ramesh disclosed that the focus of the latest investments is on solar energy conversion and that the government has other projects either with in-principle approval or under considerations that could bring further investments to Fab City, a proposed semiconductor manufacturing center near Hyderabad.

Betting on PV
Fab City, set up in 2006 to encourage the genesis of chip manufacturing in India, is now betting big on photovoltaic (PV) products. The five latest projects came from India-based firms and all are focused on the solar energy business. About half of the proposed projects for Fab City are also in the PV area.

The five additional companies are Titan Energy Systems Ltd, with a proposed investment of $50 million in solar PV cells; NanoTech Silicon India, with $2.1 billion investment for a thin film-solar cell fab; XL Telecom & Energy Ltd, investing $76.25 million to set up a solar cells and modules unit; KSK Energy Ventures Ltd, a venture capital fund that plans to set up a unit for solar PV panels with an investment of $70.25 million; and the Indian subsidiary of the Canada-based Embedded IT Solutions, planning to set up a PCB manufacturing project with an investment of $5 million.

Two earlier Fab City announcements were the $3 billion SemIndia project to create a world-class wafer fab and the Hyderabad-based Solar Semiconductor Ltd, which said it would be investing $1.1 billion over a 10-year period. The first phase is set to cover manufacture of solar cells and solar panels. The second phase will focus on solar thin-film technology, and the third would scale up manufacturing capacity to 1GW per annum.

The India government has also given an in-principle approval to five other projects worth a further investment of $7 billion. Yet another five proposals, also worth between $6 billion and $7 billion are under active consideration, Ramesh said.

In-principle allotments have been given to five other Indian companiesChandradeep Solar for an R&D unit, Neotech Solutions, Photon Energy Systems, Surana Ventures and RamTerra Solar Pvt. Ltd for several PV modules unit.

In the pipeline
Among other companies that are under consideration but which are yet to finalize their location include Videocon, which proposes a $250 million investment, and Hindustan Semiconductor Manufacturing Co. (HSMC), which has partnered with Infineon Technologies AG to set up a semiconductor manufacturing plant.

The proposed investment of $1 billion for the HSMC unit would focus on chipsets for cellphones, direct-to-home TV STBs, automotives and smart cards. The company has yet to finalize the location of its planned wafer fab.

Among other companies with an interest in Fab City is Moser Baer, which joined forces with Allied Materials Inc. for PV cells and has set up a manufacturing unit at Sriperumbudur on the outskirts of the southern port city of Chennai. Given the momentum behind semiconductor manufacturing Air Liquide of France has proposed a facility for the supply of gases and chemicals while BOC announced plans to set up a chemical plant in Hyderabad last year.

"Setting up a plant for a wrong reason, say just because the money is available, will not work," said Malcolm Penn, CEO of analysis firm Future Horizons. He said some of the proposals would work out and some would not. "You have to set up a plant for the right reasonshave a workable business plan in place and check out all the challenges in terms of manpower, infrastructure and the market. It should not be merely a sweatshopset here today because it is cheaper to do it here and then move onbut a plant fully integrated into your system," he added.

- Sufia Tippu
EE Times




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