Hindustan Semiconductor Manufacturing Corporation (HSMC), the first semiconductor project announced in India after New Delhi cleared a fiscal package to help setting up of such capital-intensive ventures, will establish 10 chip manufacturing plants costing up to $4.5 billion (Rs19,350 crore) by 2010, its founder Deven Verma said.
The Union government, which plans to support three such projects, has set up an appraisal committee under the department of information technology to evaluate which projects to extend the fiscal incentives to. “It is not who comes first, but who comes with the best deal. It is for the appraisal committee to evaluate and take the final decision,’’ Dayanidhi Maran, minister for information technology and communications, told reporters in New Delhi.
German semiconductor tech firm Infineon Technologies AG, part of Siemens AG until 1999, will license know-how to HSMC. The project, which will make chips for mobile phones, smart cards and the automotive industry, will start with a phase costing about $1 billion, to be built by 2009. The second leg, to be completed by the next year, will produce advanced chips with an investment of up to $3.5 billion.
HSMC has partnered with Siemens for infrastructure such as IT power and controls; US Filters, a former Siemens affiliate, for water and waste management; France’s Air Liquide for gases; and consultants Fairwood and Ecadi for design and construction of the plant.
The equity of each partner is yet to be decided, Verma, who is also HSMC’s chairman, said. Infineon will not own equity in the project, said the German company’s chief executive Wolfgang Ziebart.
The location of the project is also to be decided. “We haven’t closed the deal yet and are still in talks with the governments of Uttar Pradesh, Uttarakhand, Maharashtra, Tamil Nadu and Andhra Pradesh,’’ Verma said.
The HSMC unit, which will cater to both the domestic and export markets, will provide direct employment to 2,500 people—of which 500-600 people will be engineers—and indirect employment to around 25,000 people. “We have already identified around 70 experienced engineers from Singapore, Malaysia and Taiwan who will be shifting here.’’