GlobalFoundries, Infineon, IBM, ST linked to Indian fab plan

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More companies are being linked to the Indian government’s plan to get one or more semiconductor wafer fabs constructed on the sub-continent. At least five chip companies have expressed an interest in supporting the project, according to a Hindu Business Line report.

The five are: GlobalFoundries, Infineon Technologies, STMicrolectronics, Russia’s Sitronics JSC and a consortium comprising Jaypee Associates, IBM and Tower Semiconductor Ltd., the report said without naming sources. Sitronics is the parent of Mikron JSC (Zelenograd, Russia), Russia’s leading manufacturer of ICs.

Tower (Migdal Haemek, Israel), which trades as TowerJazz, had declared its interest in working on a 300-mm fab project in India in February 2012 but did not reveal its consortium partners at that time.

The Hindu Business Line report said that foundry Taiwan Semiconductor Manufacturing Co Ltd (TSMC) and chip company Freescale Semiconductor Inc had turned down the opportunity to be involved but that Intel has offered to provide advisory support.

“While Freescale and TSMC have declined the proposal, Intel has offered advisory support on infrastructure and financial matters related to semiconductor manufacturing,” the report quoted an unnamed source as saying. GlobalFoundries has said it can offer know-how for 200-mm wafer processing and processor intellectual property, the report said.

The report added that Indian government has selected management consultancy Accenture plc (Dublin, Ireland) to draw up a business proposal that could be put to the firms. Companies will not commit to the project until they know how much financial support the Indian government will provide and in what forms. Wafer fabs around the world are usually built with local and national government support and the support tends to be highest for sites where there is no history of chip manufacturing.

The Indian government invited technology providers and investors to submit expressions of interest in setting up wafer fabs back in June 2011. In September 2011 it was reported that 11 companies had pitched to the Department of Information.

Many observers are skeptical of whether chip manufacturing at anywhere close to the leading-edge is a worthwhile strategy for India because wafer fabs can cost billions of dollars to set up and other locations, such as Taiwan, have many fabs and established advantages. Nonetheless the Indian government has fostered the plan to set up local chip manufacturing as a means of easing a forthcoming balance of trade burden.

The government foresees exploding demand in India for consumer electronics which will be met by imports the country can ill-afford. Local chip manufacturing would not only offset those imports but, the government believes, bolster the growth of a manufacturing ecosystem from chips through software to systems.

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