SemIndia seeks national semiconductor policy

Urges YSR to take up the issue with the Centre

SemIndia Limited, incorporated by a consortium of companies and NRIs for the purpose of establishing a Fab City in India, has urged the Centre to come out with a national policy for the semiconductor industry before the project shapes up.

It also wants the policy to be framed in line with the policy framework adopted by China and Taiwan.

Seeking a slew of incentives and subsidies from the Andhra Pradesh government for setting up a Fab City in Hyderabad, Vinod Agarwal, president and CEO of SemIndia, urged chief minister Y S Rajasekhara Reddy to impress upon the Union government the need for formulating a semiconductor policy when he met the latter yesterday.

With the chip manufacturing industry not yet making an entry into the country, there are hardly any policy guidelines to support projects like Fab City, though the Government of India has decided to hold equity in the project.

By proposing to have a policy at the Central level, SemIndia is making it clear that it needs much more support than what it could get from any investment-hungry state.

Sources in the government said that besides promising to match the incentives offered by any other competing state, the chief minister had promised SemIndia officials that he would take up the issue of policy requirements with the Centre.

A semiconductor policy on the lines of China and Taiwan meant that all the infrastructure required for setting up a fab project should be made available to the promoters of the project free of cost, government officials felt. A fab city requires about 60 mw power and about 50 million gallons per day (MGD) of water once it becomes fully operational.

According to sources, SemIndia's wish list included free land, water and power for the proposed project and sales tax exemption.

The state government has already offered 1,500 acres of land for the project. As regards other concessions, the officials said that the state government would take a decision on the basis of merit and permissibility.

The chief minister asked the SemIndia CEO to submit a detailed proposal with all the requirements and requests to the officials, which would be put before the State Investment Promotion Board (SIPB) for a final view.

"SemIndia officials are positively inclined towards Hyderabad as the city offers them other benefits too. For instance, the sulphur dioxide content in the air is very low in Hyderabad as compared to Chennai," C S Rao, CEO of APInvest, which has been designated as a nodal agency for the Fab City proposal, told Business Standard.