BENGALURU, India -- The delay to SemIndia Inc.'s plans to have India's first major semiconductor manufacturing facility has forced it to start making early next year next-generation wireless routers and home-computer networking equipment, and later get into high-volume production of low-cost set-top boxes.
According to a report in Mint, SemIndia Systems Pvt. Ltd.--one of the SemIndia group of companies and which already makes digital modems--is focusing on the Indian market for the products it intends to manufacture, for it sees a big emerging market for broadband products in the country.
With orders in hand of $70 million, SemIndia Systems will end 2007-08 with sales of $150 million, having already produced more than 1.5 million units of ADSL modems through the electronics manufacturing firm, Flextronics. It also hopes to expand its portfolio of broadband products and services and market its ATMP services to broadband chip vendors, such as Broadcom Corp., Centillium Communications Ind., Conexant Systems, Inc. and Infineon Technologies AG, the report said
"While waiting for the chip assembly and testing facility to come up, we thought of creating a demand for [broadband] chips and chip vendors," the report quoted B.V. Naidu, managing director, SemIndia Systems, as saying. The manufacturing partner has not been decided for these products, but the firm is talking to four potential customers in India and two potential buyers overseas, it said.
While the report did not say so, the delayed announcement of both a policy for chip manufacturing and guidelines for companies intending to manufacture semiconductors to apply for incentives and concessions have, together, caused at least a year's delay in the start of chip manufacturing in the country.
The regional government of Andhra Pradesh will now have 89 percent of the equity in the Fab City project, the complex coming up in Hyderabad that will house the SemIndia fab and one or two more similar projects. Earlier, the government was to have picked up only 11 percent of the equity, while the promoters of SemIndia and other strategic investors were to have held 89 percent.
"The change [in equity holding] was prompted by apprehensions that other chip makers keen on setting up projects at the Fab City may find it difficult to come in with SemIndia, the developer," the report quoted B.P. Acharya, chairman of Andhra Pradesh Industrial Infrastructure Corporation (APIIC), as saying. The 11% equity owned by SemIndia will come down further, and when additional companies come in with over a billion dollars in investments, the APIIC will also dilute its equity holding, the report added.
The Fab City is a 1050-acre facility that is set to house the first two or three semiconductor manufacturing units in India and is located in the state of Andhra Pradesh.