Date:15/05/2007 URL: http://www.thehindubusinessline.com/2007/05/15/stories/2007051504520400.htm

Back Taiwanese chip firm wants to set up fab unit in India

Thomas K. Thomas
Priyanka Vyas

Commits $3 b in investment

New Delhi May 14 A Taiwanese-based chip manufacturing company has expressed interest to set up a fab unit in India at an investment of $3billion. The company has sent a letter to the Communications Ministry expressing its interest said senior Government sources without revealing the name of the firm.

This will be the third company to announce India-specific plans after the Government announced its semi conductor policy to offer fiscal incentives to companies setting up fab units in the country.

Earlier, Hindustan Semiconductor Manufacturing Corporation (HSMC) announced an alliance with Infineon Technologies of Germany to set up 2 chip manufacturing plants in India with an investment of $4 billion. SemIndia has also announced its plans to set up a fab unit.

Semi conductor policy

The Ministry of Communications and IT under Mr Dayanidhi Maran had earlier announced a semiconductor policy which offered incentives for the manufacturers of all semiconductors, displays including LCDs, organic light emitting diodes, plasma display panels and any other emerging displays, storage devices, solar cells; photo voltaics and other advanced micro and nanotechnology products.

As per the policy, the Government will bear 20 per cent of the capital expenditure during the first 10 years for units located inside SEZs, and 25 per cent for those outside. The policy does away with the countervailing duty (CVD) on capital goods, in case of units outside the SEZs.

For semiconductor manufacturing plants, the policy proposes a minimum investment of Rs 2,500 crore.

The same for ancillary plants would be Rs 1,000 crore. The Government's participation in the projects would be limited to 26 per cent of their equity portion.