LONDON Intel Corp. is expected to sign a deal to become a partner in a chip manufacturing project in Hyderabad, southern India, that was formerly associated with IBM Corp. according to a New Kerala report.
NanoTech Silicon India Pvt Ltd (NTSI) has already begun work on its wafer fab sited near an airport under construction at Shamsabad, about 12 miles from Hyderabad, the report said. Intel has reportedly decided to become a technology and financial partner in the project and is expected to sign the deal next week.
Intel is expected to hold an equity stake of $32 million and become a technology partner for the facility, the report said. The Andhra Pradesh government is expected to hold equity of $24 million and provide infrastructure and tax exemptions.
A ground-breaking ceremony for the fab, the first major semiconductor fabrication facility to be launched in India, was held in
June 2005. The fab, intended to make low cost logic chips for consumer electronics goods, has Korean backing and Samsung Engineering has been contracted to provide the design of the wafer fab and supervision of its construction. IBM had also been associated with the project as a technology partner although doubt was cast on IBM’s commitment at the time of the ground-breaking.
NTSI's first fab, for 200-mm diameter wafers, has a modest price tag, by modern chip industry standards, of $600 million although Korean backers Intellect have projected spending of $12 billion over 15 to 17 years.
The NTSI facility is expected to be part of the Fab City complex, a project which is being proposed by SemIndia Inc. (Palo Alto, Calif.), a consortium of wealthy expatriate Indians which has signed up Intel’s rival Advanced Micro Devices Inc. This proposal is for a much larger megafab projected to cost $3 billion (see Feb. 9 story).
Intel executives including Intel Capital president and Intel Corp. senior vice-president Arvind Sodhani met Andhra Pradesh chief minister Y.S. Rajashekara Reddy in Hyderabad along with NTSI executives, a Business Standard report said. Quoting unnamed sources, the report said Sodhani conveyed Intel’s plan of holding $32 million worth equity in the project to state government.
The NTSI plan is to initially build a logic semiconductor fab with a capacity of 30,000 wafers a month, starting with 0.35-micron process technology. About 60 percent of the fab capacity will be offered to technology partners and captive customers.
When it begins operations the fab is expected to make peripheral chip sets for manufacturers of PCs, cellphones, televisions, DVD players, and automotive ICs, the report said. Intellect has plans for a second NTSI fab, for 300-mm diameter wafers, at a cost of $2.5 billion to $3 billion, the New Kerala report said.
Intel has participated with startup wafer fabs in the past. The chip giant donated CMOS process technology to Communicant Semiconductor Technologies AG (Frankfurt-an-der-Oder, Germany), a $1.5 billion plan to create a silicon-germanium foundry, but the plan collapsed in November 2003.
K.C. Krishnadas contributed to this story.