Union Communications and IT Minister, Dayanidhi Maran, was non-commital about giving a nod to the plans of Hindustan Semiconductor Manufacturing Corporation (HSMC) to invest $4 billion to set up a Fab City in India in partnership with German technology major Infineon Technologies.Maran reiterated the government's stance on semiconductor manufacturing units in India -- that there was space only for three fabs in the country apart from the SemIndia facility in Hyderabad. The HSMC announcement comes less than a week after the government notified the semiconductor policy, which gives tax sops to companies setting up fab units."We will choose the best three, based on their business plan and financial credentials and not merely the biggest. Each of the proposals will be reviewed by the Appraisal Committee," Maran said. Maran also hinted that there would be "several more announcements" in the coming weeks.Deven Verma, founder and chairman, HSMC said the proposed Fab City had a capacity for up to 10 foundries. "We will begin the project with two foundries," he said.As per the terms of the MoU with Infineon, the latter will license its 130nm (nanometer) CMOS (complimentary metal oxide semiconductor) basic process technology, along with its process technologies for radio frequency, embedded flash for chip card applications, and embedded flash for automotive applications to HSMC. Infineon will also offer expertise and advice for the technology transfer, and setting up of the fab. The cost of each foundry will be $750-850 million for a 200 mm foundry, while it may cost up to $3.2-3.5 billion to set up a 300 mm foundry.The semiconductors would be used in mobile phones, SIM cards, smart cards and automotive cards. Phase one of the project will build nodes from 2009 onwards under the 200 mm foundry, Verma said. HSMC is currentlyscouting for suitable locations across the country and will submit its proposal to the Government for approval.Maran, on his part, instructed HSMC to "visit all the states and choose the one which gives you the best incentives."
