Fab at Rs 14,000 cr in Hyderabad

HYDERABAD: Seoul-based Intellect Inc., would start actual production of chip making by July 2006. Informing this on the sidelines of the CII's two-day e-hardware summit, P June Min, Chairman, Intellect Inc., said that the foundation for setting up the fab would be done early in Hyderabad in February 2005.

The fab to be christened Indian Semiconductor Manufacturing Company (ISMC) would come up in two phases. Phase I involves an investment of $600 million of which $160 million would be in the form of equity-$80 million from Indian and $80 million from foreign players. Of the $80 million equity from the Indian players $40 million would come from the industry players like Reliance, Tata and others. "We have also put up a proposal to the government of Andhra Pradesh to grant $150 million that would go in to the setting up of the facility and an additional $40 million by the central government," informed Min.

Phase II would be set up with an investment of $2.5 billion after two years of setting up of the first phase. The proposed fab would thus manufacture chips, wafers that would cater to the consumer electronic market. "This eight inch fab doesn't produce flash memory or microprocessors whose market is just 15 per cent in India. The semiconductor chip market for consumer electronics in India is around $900 million and by the time we are ready with our production in 2006, the same would reach to $1.2 billion. We are targeting to address nearly 70-85 per cent of the market share," explained Min.

Of the production being made, 80 per cent of it would be for domestic markets and 20 per cent would be put in exports. Talking about the customers for the chips to be manufactured, Min said, "We are in discussions with customers like LG, Samsung, Motorola, Millennium electronics, etc. The idea is also to attract investments from any of the customers." Also, once set up, the facility is going to generate 10,000 employment opportunities.

Intellect, a promoter of such fabs has already set up eight similar units across the world with two facilities in China alone. In terms of size, based on the investments being made, Min said that this is a medium sized project and they are involved with much more huge investments in other parts of the world. He also added that they are going to sign a MoU with the government of Andhra Pradesh in the next 10 days and the foundation ceremony would take place in Feb '05.