Date:25/09/2006 URL: http://www.thehindubusinessline.com/2006/09/25/stories/2006092502480200.htm

Back Panelists debate financial viability of fab units here

Our Bureau

Hyderabad , Sept. 24

Providing historic data of the semiconductor companies globally, JP Morgan expert, Mr Bhavin Shah, today questioned the wisdom and feasibility of setting up the semiconductor facility in India.

Mr Shah, to substantiate his argument cited that barring TSMC, the Taiwan-based fab, most of the units were not doing well financially be it in Japan, South Korea or even China.

Participants at the TiE-ISB Connect questioned Mr Shah's views and the STPI Director, Mr B.V. Naidu, shot back stating that the studies conducted by independent research firms such as Frost and Sullivan and several others have showed huge potential in the market.

Even assuming that they were on the high side, the Indian Semiconductor Association and the Central Government too believe that there was huge potential for the semiconductor fab in India, given the projections for demand from consumer electronics.

Yet another panellist, Mr Kishore Manghnani of Marvell, argued that there was no need for a fab but the attention could be trained on other areas of the semiconductor industry such as ICs. This was because, the financial viability of a new fab project was often being questioned.

Mr Naidu said that if one looked at the role played by Indian developers for the semiconductor industry, they were present in the entire chain of the industry. It was just an issue of lacing their expertise together to make success of the semiconductor industry.

The Vice President of Cadence, Mr Aurangzeb Khan, said that it was projected that the electronics and wireless market would consume about $98 billion worth semiconductors by the year 2010 and India could account for about 11 per cent of this market.