SemIndia has become a lightning rod in the Indian semiconductor debate. Typical of the bolts sent its way was an editorial last month in the Indian business journal Business Standard that asked, "Why is SemIndia gung-ho about the $3 billion Fab City project?"
It's a question many feel the company has not fully answered.
"It's not clear what SemIndia's mission is," one critic suggests, noting that since its founding the company has changed course several times, most recently shifting its focus "beyond semiconductors, and beyond India."
Indeed, SemIndia's reach already exceeds the stated grasp of the mission statement posted on the www.semindia.in Web site, which states "SemIndia is developing a consortium with investments from strategic partners, including [the] Government of India and one of the state governments, to manufacture advanced semiconductor chips for personal computers, cell phones, set-top boxes and broadband connectivity, with the objective of making India a hub for semiconductor manufacturing."
"To get a head start, we have tweaked our strategy a bit," said B.V. Naidu, SemIndia's managing director.
Last month, the company formed SemIndia Systems, a subsidiary created through the acquisition of Bengaluru-based Exalted Networks in an $8 million cash-and-stock deal. SemIndia's new systems arm has a number of products in the pipeline, including ADSL modems, digital subscriber line access multiplexers, gigabit passive optical networking equipment and WiMax products.
SemIndia is reportedly close to completing two similar deals with other fabless semiconductor makers.
SemIndia was formed around a group of successful Indian technologists with overseas experience. Founder and COO Paul Mahal is a 20-year industry veteran who worked at Philips/Signetics as a process engineer and at Catalyst Semiconductor as a process technologist. At Catalyst, Mahal transferred technology to Seiko and Oki in Japan and to STMicroelectronics in France, and worked with foundry Chartered Semiconductor Manufacturing in Singapore.
Vinod Agarwal, the founder of LogicVision Inc. (San Jose Calif.), serves as chairman, president and chief executive officer. Financial backers include fabless ASIC design and manufacturing giant Flextronics and private-equity fund Sandalwood Partners. SemIndia has been linked over the years to other prospective backers, such as Broadcom, as well.
At the end of 2005, SemIndia signed an agreement to license Advanced Micro Devices Inc.'s process technology for a planned wafer fabrication and assembly, test, marking and packaging (ATMP) operation. AMD and SemIndia said they will jointly develop and market semiconductor solutions for India. SemIndia has also inked a technology exchange agreement with Belgium's IMEC semiconductor research consortium. Both partnerships, however, appear to be in limbo at the moment.
"While waiting for the ATMP plant to come up by next year, and the fab that will follow, we have acquired the engineering division of Exalted, an Indian firm making telecom products," said Naidu. "We have embarked on this IDM model to create the market in India for high-volume products. After six months, we would have manufactured 2 million ADSL modems and by the end of this year, we would be manufacturing 4 [million] to 5 million pieces."
The company is reportedly in talks with global private-equity funds to raise money for the acquisition of ATMP plants and fab units throughout the world. It is said to be scouting for ATMP operations in Thailand, Malaysia, Singapore and Taiwan.
-- Richard Wallace
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