India Announces Incentives, Seeks Semiconductor Investment
The India cabinet on February 22 approved incentives to attract foreign investme
nt to the semiconductor sector, including manufacturers of semiconductors, displ ay units, storage devices, solar cells, and other micro and nanotechnology produ cts, according to Rueters India. The government will bear 20 percent of capital expenditures in the first 10 year s if a unit is located within Special Economic Zones (SEZs) and 25 percent in ca se of other units. The minimum investment was set at 25 billion rupees ($566 mil lion) for semiconductor manufacturers and 10 billion rupees for other micro- and nanotechnology makers. India Semiconductor Association (ISA) President Poornima Shenoy termed it an extremely positive policy. India has enormous appeal for different parts of the semiconductor value chain. Many semiconductor and systems companies have established their own design cente rs in India and semiconductor manufacturing would gain considerable benefits if they could locate manufacturing in the same country as their design operations. India is already a major contributor to the global technology market. According to Frost & Sullivan, semiconductor and embedded design revenues are expected to grow from $3.2 billion in 2005 to $43 billion by 2015. The India semiconductor m arket is expected to grow from $2.82 billion in 2005 to $ 36.3 billion in 2015. Electronics manufacturing is estimated to reach $155 billion in 2015, creating a $15.5 billion semiconductor market opportunity. SEMI has several member companies with operations (mostly design) in India and m any others are active in the India market through partners and representatives. SEMI members who are members of ISA include Applied Materials, Aquest Systems, A viza, Brooks Software, KLA-Tencor, Novellus Systems, Synopsys, and Satyam Comput er Services. Major project initiatives include SemIndia, Nano Tech Silicon and HSMC. SemIndia announced a $3 billion "Fab City" project last year, including a $100 million A TMP facility. Nano Tech Silicon has land in Fab City and HSMC (Hindustan Semicon ductor Manufacturing Inc.) reportedly announce their plans in a few weeks that m ay include a first phase for 200 mm wafer size and second phase of 300 mm wafers . In addition the Indian Institute of Science is planning a MEMS proof-of-concep t minifab to work on fabrication and materials research. Other important players in India include Tessolve, SPEL and Semiconductor Comple x Ltd. In support of other emerging markets such as China, SEMI has advocated governmen t policies, conducted government education efforts, organized trade missions, an d facilitated financial and industry collaborations to foster market development . SEMI is currently working closely with ISA and has supported two government de legations in the past year. SEMI has a regular presence in the subcontinent at i ndustry and member meetings. By cultivating the semiconductor manufacturing industry, India has the potential to become to become a significant new market for SEMI member companies. While many observers are skeptical of near term-contribution to semiconductor an d display manufacturing, India s announcement may yet be the first rumblings of a sleeping giant.