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Work begins on Hyderabad fab, doubt cast on IBM role

Posted: 28 Jun 2005 ?? ?Print Version ?Bookmark and Share

Keywords:nano-tech silicon? wireless handsets�logic chips? consumer electronics?

A ground-breaking ceremony for Nano-Tech Silicon India Pvt. Ltd - the first major semiconductor fabrication facility to be launched in India - was held Sunday (June 26) on the outskirts of Hyderabad in southern India.

The fab, intended to make low cost logic chips for consumer electronics goods, has Korean backing. Samsung Engineering has been contracted to provide project design and supervision. However, P. June Min, the South Korean promoter, cast doubt on whether IBM Corp. (see June 21 story) would take an equity stake in the wafer fab and participate as a technology partner, saying that this was only "a 50 percent possibility."

The project appears to have switched names. Earlier discussion of the Intellect-backed wafer fab project referred to India Semiconductor Manufacturing Co. Ltd. The Indian chip making project is now being estimated to cost about $12 billion over the next 15 to 17 years, presumably involving a series of wafer fabs.

The first fabrication unit is estimated to cost about $600 million, but there are talks with potential partners which could result in up to 20 percent of the equity of Nano-Tech Silicon being sold to a partner.

Min said a leading Indian bank had agreed to syndicate nearly $300 million in debt financing for the project. The equity holding and other finances are expected to be settled and in place within the next couple of months. At least one leading Indian business is likely to purchase equity in Nano-Tech Silicon. Two private individuals, the Andhra Pradesh Industrial Infrastructure Corp. and Min himself have invested in the seed financing, the amount of which was not disclosed.

The foundation stone for the first Nano-Tech Silicon facility was laid by Andhra Pradesh Chief Minister Y.S. Rajashekara Reddy. The facility is due to be completed in about 18 months. The fab, which is expected to be an 8-inch plant, would have a total capacity of 30,000 wafers per month. Volume production is expected to begin by July 2006.

The Andhra Pradesh state government has promised the availability of 10,000 gallons of water daily and 40 megawatts of power for the project, which will provide employment for about 1,200 people.

Nano-Tech Silicon is expected to address India's needs for standard IC products and to develop low-cost chip set solutions for digital video disk players, wireless handsets and color television sets, among others.

- K.C. Krishnadas

EE Times

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