Intel to set up $400 m assembly test facility

The country's new special economic zone (SEZ) policy has helped the US-based Intel make up its mind on locating its $400-million assembly test manufacturing facility. The country would now host the facility where Intel chips would be manually wired for testing.

Intel plans to locate the facility in a SEZ. "We were able to convince Barett to set up the facility in India and this is owing to the new SEZ policy," said Dayanidhi Maran, minister of communications and IT, while addressing a press conference here today.

The minister was on a five-day trip to the US to meet Intel chairman Craig Barett after the company was said to be weighing its options of Vietnam, India and China.

Intel will make the investment by setting up its assembly test manufacturing facility in India. The international chip making giant has shortlisted Chennai, Noida and Bangalore for setting up the facility.

Intel is assessing issues relating to infrastructure and transportation with the concerned state governments and a formal announcement will be made by Barett in a month.

Maran is also in talks with another US major IBM for cooperation in setting up semi-conductor fabrication units in India. This would be done in collaboration with India Electronic Manufacturing Corporation and the India Semiconductor Association.

The government is looking for $3-billion investment in fab-city through greater private participation and is currently in talks with various state governments for a suitable location.

Maran expects that his US visit will lead to FDI of $1.2 billion for the coming year.

Maran also met representatives of Flextronics and Solectron to impress upon them to increase their investment in India. Flextronics currently has an investment of $900 million in Bangalore but Solectron does not have any operations in India.