US-based solar chip-maker to invest $2b in India over next decade

US-based solar chip-maker to invest $2b in India over next decade
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First Published: Fri, Jun 08 2007. 12 53 PM IST
Updated: Fri, Jun 08 2007. 06 19 PM IST
New Delhi: The Palo Alto, California-based Signet Solar Inc., founded in 2006 to design and manufacture low-cost thin-film silicon modules that convert solar energy into power, said on 7 June that it will set up three solar photovoltaic manufacturing fab units in India at an investment of over $2 billion (Rs8,100 crore) spread over the next 10 years.
The three fab units would have an annual output of 300 MWs each and will together produce over 1 GW of annual output for both the domestic as well as global market. Construction of the first plant is scheduled to begin early next year. The company plans to raise the $2 billion investment through a combination of private equity, debt and incentives.
This is the third company to announce semiconductor manufacturing plans in India after the government offered fiscal incentives early this year to companies setting up fab units in the country. Under the semiconductor policy, the government will bear 20% of the capital expenditure for the first 10 years for units located in SEZs and 25% for those outside these zones. State governments are also offering special incentives to such fab units to encourage investments in high-tech industries. The scheme is valid till 31 March 2010.
Industry experts are positive about such investments in the semiconductor manufacturing space in India and feel that the policy has been successful in drawing some very positive incentives for India. “”It is heartening to see the early impact of the policy. Solar fabs are an important part of the hi-tech manufacturing ecosystem. In connection with manufacturing one of the areas of concern has been of quality and of continuous power. This will provide a viable option,” said Purnima Shenoy, president of the Bangalore-based India Semiconductor Association.
In March this year, venture capitalist Devendra Verma-backed Hindustan Semiconductor Manufacturing Corporation (HSMC) partnered with German-based Infineon Technologies to set up two chip manufacturing plants in India at an investment of $4 billion. The company which has a manufacturing base in Germany and has commenced operations there this month, also plans to set up a R&D development base in India where it will design the photovoltaic system for local application. The R&D locations were not disclosed.
“We are talking to the various state governments for setting up the fab units including Andhra Pradesh, Tamil Nadu, Maharashtra and Uttar Pradesh and will go where we get a viable incentive and where there is a huge demand for electricity,’’ said Dr Rajeeva Lahiri, founder and CEO of Signet Solar Inc. He added that the first plant is likely to be in a SEZ in order to cater to exports. Applied Materials Inc, which signed a contract with Signet Solar in May this year will provide fully integrated thin film production lines in India.
Signet Solar’s PV modules convert the sun’s rays into electricity for applications such as solar farms, rural electrification, residential rooftops, large commercial Installations, building integrated photovoltaic applications and remote habitation.
Thin-film silicon technology enables over 40% cost advantage over other mainstream solar technologies. Current annual worlwide generation of electricity is over 15,000 MW of which less than 1% is produced by solar energy. India’s Ministry of Renewable Energy has set a target to produce 10% of the country’s power requirements through renewable energy sources by 2010.
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First Published: Fri, Jun 08 2007. 12 53 PM IST