New Delhi: Intel's rival AMD and a little known company called SemIndia have signed a deal to set up a chip fabrication plant in India at an investment of Rs 300 crores.
The agreement is just the kind of trophy investment that Communications and IT Minister Dayanidhi Maran has been working on since he took office.
The plant will be a foundry, not dedicated to AMD, though AMD will be the technology anchor and will buy back some of the production.
"This is going to be a SemIndia facility managed by them. We will provide all the help and technology we can. It is more than an exchange of paper," Chairman, President and CEO, AMD Inc. Hector de J Ruiz said.
Apart from the money that the project will bring in, a tangential benefit will be the chip designers and fabricators who are expected to come down to India.
Given its size, the public-private partnership will be seen as a national champion and state governments are expected to vie for it.
"It depends on which state government will give incentive and support for the project. Definitely it will take off," Maran said.
Now that the project has government support it expects adventurous investors and suppliers to join in.
"In the next 10 years we are looking at importing chips worth Rs 150 crores," Vinod Agarwal, President and CEO, SemIndia said.
This year chips worth Rs 24,500 crores are expected to be sold. Lumpy investments makes this commodity business, cyclical in nature and the boom-bust cycle can turn national champions into white elephants.
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