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US company AMD commits money to Indian chip company
Mr. Marathe is currently president of AMD India. AMD has committed to technology transfer and has also promised to pick up equity in SemIndia.
"The extent of their participation will be known after the semiconductor policy is announced," said SemIndia CEO Vinod Agarwal. That announcement is expected by the end of the month. The industry hopes the government will subsidize the plant to the extent of 25 percent.
Many myths about's proposed $3-billion semiconductor fabrication unit, or fab, were demolished Monday at the India Semiconductor Association's India Vision Summit in the southern city of Hyderabad.
It turns out that SemIndia's plant will not unfold in the way a traditional fab would; instead a new model is being worked out to suit's domestic needs.
One plan is to acquire fabs globally, operate them in their original locations initially, but move them into over a period of a few years.
None of the acquisitions are likely to be in cutting-edge plants. Since the focus is the domestic Indian market, the target fabs are most likely to be those manufacturing chips of 90 to 130 nanometers. These chips go into cell phones, set-top boxes, TV sets, and Internet access equipment such as DSL modems.
"That's the sweet spot for SemIndia," said Bob Kondamoori, managing director of the venture capital firm Sandalwood Partners. His firm has invested $10 million to buy a 5 percent stake in SemIndia, the same as Flextronics.
"We need to have multiple fabs," said Ajay Marathe, who will join as COO of SemIndia next week.
Mr. Marathe is currently president of AMD India. AMD has committed to technology transfer and has also promised to pick up equity in SemIndia.
"The extent of their participation will be known after the semiconductor policy is announced," said SemIndia CEO Vinod Agarwal. That announcement is expected by the end of the month. The industry hopes the government will subsidize the plant to the extent of 25 percent.
Splitting TasksSemIndia plans to have a bunch of subsidiaries carrying out specific tasks. The Fab City project, for instance, will ensure that the 1,200 acres of land allotted by the government are developed and utilized to the optimum level.
Another subsidiary, SemIndia Systems, will undertake design-related work for chips that may—in the long run—be manufactured at the SemIndia plant. For starters, SemIndia has bought a big stake, of an unknown value, in the Bangalore-based chip design firm Xalted.
SemIndia Systems thus starts out with 100 design engineers whose first task is to design and build the systems integration component for DSL modems. The components of these modems will be manufactured at Flextronics' plant in nearby Chennai but will be branded and sold by SemIndia to the state-owned telephone company Bharat Sanchar Nigam Ltd (BSNL).
SemIndia has recently been hiring high-profile professionals, an indication that the project is definitely taking off despite delays in the policy announcement.
Apart from Mr. Marathe, BV Naidu—until recently director of the Software Technology Parks of India of two southern states of Karnataka and Andhra Pradesh—has joined as managing director of SemIndia Systems.
George Shaw, an American with 20 years in the semiconductor-manufacturing industry, has also recently joined the company to head the manufacturing plant.
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