The Hindu : Business : Intel likely to set up $400 m manufacturing facility in India

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Thursday, Jun 09, 2005

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Intel likely to set up $400 m manufacturing facility in India

Maran hands over letter from the Prime Minister to Barrett

— Photo: PTI

INVITING INTEL INSIDE: The Union Communications and Information Technology Minister, Dayanidhi Maran, handing over a letter from the Prime Minister, Manmohan Singh, to the Chairman of Intel, Craig Barrett, at San Francisco on Tuesday.

SILICON VALLEY: Intel Corp., the world's largest chipmaker, is likely to set up an Advanced Test Manufacturing (ATM) facility in India at an estimated investment of more than $400 million.

Indications to this effect were made available after a meeting between the visiting Information Technology Minister, Dayanidhi Maran, and the Intel Chairman, Craig Barrett.

"They have more or less decided to come to India. They need some more time to complete formalities, which, I am sure, they will,'' Mr. Maran, who is on a five-day visit to the U.S., told PTI here on Wednesday.

During the meeting, designed to impress upon Intel the benefits of setting up a factory in India, the Minister handed over a letter from the Prime Minister, Manmohan Singh, in this regard.

Over the past year, India had been aggressively lobbying firms, including Intel, to set up manufacturing units in the country. "I have been having this discussion with Craig Barrett for several months, since he came and met us eight months ago,'' the Minister said.

The chipmaker was yet to determine which city to set up the facility in, with Chennai, Bangalore and Noida in the running. During early discussions, Intel had indicated the plant would require an investment of about $400 million.

Although a number of multinationals have several software and chip design facilities in the country, none has set up fabs in India.

Intel had shortlisted India and China as the two possible locations for its next manufacturing facility and its decision to choose India should serve as a major boost for the country and is expected to have a really big multiplier effect.

Intel, a $34 billion company, has a development centre in Bangalore, with design and developed software to power chips that drive computers and high-end network for Internet based applications.

However, it does not have a full-fledged manufacturing plant in Asia, its fastest growing market. At present the company manufactures chips in the U.S., Ireland and Israel.

Many industry analysts have been concerned that despite its success in the software sector, it would be hard for India to realise its ambition of becoming a technological superpower without a semi-conductor manufacturing industry.

In addition, in view of the rapidly growing market in India, it is vital that the country develop a manufacturing base or it would be left holding a huge import bill for computer chips, most of which would come from China.

Mr. Maran, who explained to the Intel Chairman various policy initiatives taken by his Ministry to promote investment in the IT hardware manufacturing sector in India, said the Government was focussed specifically on manufacturing.

The Minister said he had taken upon himself to get manufacturing companies in the IT and Telecom sectors to set up facilities in India.

Mr. Maran, who has had a significant success with telecommunications companies with Nokia and LG electronics investing millions of dollars in the country, sounded upbeat about his current trip to the Silicon Valley. He said most companies he visited, including CISCO and Applied Materials, were seriously considering India for expansion. — PTI

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