IBM’s rebuff forces Isro to fend for itself

IBM’s rebuff forces Isro to fend for itself
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First Published: Fri, Jul 25 2008. 05 35 AM IST
Updated: Mon, Aug 11 2008. 06 49 PM IST
Bangalore: Indian Space Research Organisation, or Isro, will now upgrade a semiconductor fabrication unit, or fab, on its own after International Business Machines (IBM) Corp., the vendor it had shortlisted, declined citing fears that India’s space agency may use the chips designed there to guide rockets and satellites for India’s military.
In 2006, IBM won a face-off with another US-based firm, Atmel Corp., to handle a nearly Rs500 crore contract to upgrade Semi-Conductor Laboratory (SCL), India’s oldest chip foundry, in Chandigarh.
Isro, which, in turn, acquired the fab from the ministry of information technology in 2005, planned to upgrade it to produce chips of 0.25 micron size from the current 0.8 micron (micron is a unit of length, which is one-millionth of a metre). “In all these projects, the components are all of dual-use technologies (and) many people don’t agree that they can part with the technology they have,” said G. Madhavan Nair, chairman of Isro. So, “we are going on our own now. Entire rocket technology and satellite technology we have developed ourselves. We can also develop (on our own) semiconductor technology.”
But, efforts to build semiconductor fabs in the private sector are yet to take off in India, despite big plans by several firms.
India has around 11 fabs, all captive to the government needs in space and defence, according to India Semiconductor Association (ISA), a lobby for the semiconductor industry. “The country has no commercial fabs. It needs to be addressed through the semiconductor policy implementation,” said Poornima Shenoy, president of ISA in an email response.
IBM wanted the space agency to declare in advance — before a contract was signed — guarantees about the end-use of chips made from the upgraded foundry, said a person familiar with the development who didn’t want to be named. US law, which governs IBM, mandates firms dealing with dual-use technologies insist their customers sign the so-called end-user agreement.
The chips produced in SCL are used by Isro in the satellites and rockets it designs. But, the same person didn’t rule out the use of these chips in “strategic programmes” or, those that guide missiles, or in other defence projects.
An IBM India spokesman said the company doesn’t comment on client issues.
Analysts say sourcing of such technology by institutions such as Isro would indeed put them under the export control regime of the US.
“If we can do well in rocket science, chip technology shouldn’t be difficult. We should know how to put it on the table correctly,” said Ajey Lele, a research fellow at the Institute for Defence Studies and Analyses, a New Delhi-based think tank.
IBM’s insistence of an end-user agreement also comes against the backdrop of an India-born businessman, Parthasarathy Sudarshan, being jailed for violation of the US export control laws over selling vintage Intel chips allegedly for India’s light combat Tejas programme and rocket programmes. Sudarshan, chief executive of Cirrus Electronics, an American firm, was sentenced by a US court in January to a 30-month prison term.
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First Published: Fri, Jul 25 2008. 05 35 AM IST