India may get semiconductor fabs after all

India may be closer to getting an important jewel in its technology development crown: a semiconductor fab set up by a multinational company. A number of companies have announced tentative steps towards setting up fabs in the country.

The absence of semiconductor fabs set up by multinational companies in India has been a gray patch in the country’s emerging profile as a leading technology development location. A number of semiconductor companies, like Texas Instruments Inc. in Dallas, Texas, and Broadcom Corp. in Irvine, California, have chip design facilities in India, but have been reluctant to set up fabs in the country, in part because of its poor infrastructure. But a local newspaper report published Friday about Intel Corp. looking into possible locations for a fab could mark an important change.

According to The Economic Times, Intel, in Santa Clara, California, has zeroed in on Chennai in South India as a possible location for a new semiconductor fab. A spokesman for Intel said the company had not finalized plans for a fab in Chennai, but didn’t rule out a future Intel fab in India.

“There is no definite plan to set up a manufacturing facility in India, even at a nascent stage,” said Varghese Thomas, communications manager at Intel India. However, Intel has been looking around in India for probable sites to locate a fab, according to Thomas. “It is Intel’s strategy to keep looking out for sites globally, for possible future expansions in growing markets.”

Additionally, the hopes for a fab in India are not just pinned on Intel. Cypress Semiconductor Corp. in San Jose, California, may also consider setting up a facility to manufacture solar cells in India, according to T.J. Rodgers, the company’s president and chief executive officer, who was in India recently.

SunPower Corp., a majority-owned subsidiary of Cypress, has set up a solar cell facility in the Philippines, near Manila. “We would like to have a second facility, and we want to be in two sites,” said Rodgers. “So it is likely we may locate it in India.”

India isn’t completely without existing fabs, though they are small in scale and in need of updating. Three of India’s government-owned companies, Bharat Electronics Ltd. in Bangalore, Semiconductor Complex Ltd. (SCL) in Chandigarh and ITI Ltd. in Bangalore, operate very large scale integration (VLSI) fabs with outdated process technologies and suboptimal production scales.

SCL, for example, has a 6-inch wafer fabrication facility, capable of processing wafers in 0.8-micron technology. These facilities are primarily used by these companies for pilot production runs of chips they design.

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