Sops may turn Andhra into semiconductor hub

Written by Vrishti Beniwal | New Delhi, Oct 11 | Updated: Oct 12 2007, 05:33am hrs
Karnataka may be core of IT in India, but when it comes to chip manufacturing, Andhra Pradesh is likely to emerge as the semiconductor hub of the country. The state is offering various incentives such as power at a reduced rate, adequate water and lower stamp duty which are over and above the incentives given by the Centre in the fab policy.

Besides, a Fab City is also coming up in Hyderabad. According to SemIndia chairman and CEO Vinod Agarwal, most companies generally try to cluster in one place, and as Hyderabad has a suitable weather, roads, a semi-skilled workforce, electricity and water, it may be the most preferred choice.

Andhra Pradesh, Karnataka and Tamil Nadu were shortlisted to host the Fab City when the project was announced in 2006, but ultimately Hyderabad was selected.

The SEZ, to be located on 1,200 acres of land, will create 5,000 jobs by 2009. The state is also setting up a pipeline to bring 20 billion gallons of water a day to the Fab City.

Other states are also trying to lure investors, but due to infrastructure constraints they cant host a full fab. West Bengal, for instance, is in talks with companies like TSMC and Videocon for chip design and assembly-test-mark-pack units in the state. Though the state cant offer a huge chunk of its fertile land for fabs, it boasts of skilled manpower and abundant water and power supply, which are integral to a semiconductor facility.

About a dozen companies, including some multinational companies, have sent enquiries. But we want to make a small beginning with fabless semiconductor because water and land requirements of a full fab are huge, said Siddharth principal secretary of West Bengal.

West Bengals India Design Centre a Rs 100-crore semi-conductor facility, will become operational in next nine months. We are in the process of finalising a special package. India Design Centre is one such incentive, where a company can get everything under one roof, Siddharth added.