MUNICH, Germany Infineon is likely to take a stake in recently-launched Hindustan Semiconductor Manufacturing Corp. (HSMC), according to a report in the Economic Times of India. The amount of equity Infineon will take has yet to be determined.
The paper quotes HSMC top manager Devendra Verma saying that the German semiconductor manufacturer will "definitively" take "some equity" in the Indian company. According to Verma, the amount of Infineon's stake will be finalized during the ongoing negotiations, which are expected to be finalized within the coming six weeks.
An Infineon spokesperson declined to acknowledge the statement directly. "We always said that the financial terms of our licensing agreement with HSMC are yet to be negotiated," he said. "There are many options, including an equity holding - eventually."
According to Economic Times, HSMC is presently in talks with financial institutions and state governments to raise funds for the first of its two planned semiconductor manufacturing sites in India, with the exact location still under discussion. Possible locations are Karnataka, Chennai or Hyderabad, Verma said. Decisive factors are, besides incentives from state governments, resources like water and electric power. The first fab to be built is planned to produce 8-inch wafers. This site will require investments of approximately $1 billion. In addition, HSMC plans to erect a second fab, intended to process 12-inch wafers, which will require another $3.2 to $3.5 billions of investment.
Two weeks ago, HSMC had announced that it will license process technologies for standard CMOS chips as well as for RF and embedded flash devices from Infineon. In addition, Infineon will offer expertise and support for setting up the fabs and crank up production. However, Infineon hitherto avoided the impression it was interested in a direct investment into HSMC.