Intel Inside Hyderabad

Intel Inside. After SemIndia's $ 3 billion project, Hyderabad has bagged yet another big name in the semi conductor business. Back in action is Korean entrepreneur, June Min who had signed an agreement a year ago with the AP Government ago to set up a NanoTech Silicon India Pvt Ltd NTSI).

Since then, there has been a lull which was broken by the high profile bid by Bangalore, Chennai and Hyderabad to bag the prestigious SemIndia project. After having swung that deal, there seems to be more news that is coming the way of the Andhra Pradesh state government with Intel joining June Min to make chips for a range of products ranging from Computers to Washing machines.

NanoTech on 29th March confirmed its tieup with the world’s largest chip manufacturing giant Intel Corporation. NTSI, promoted by Min, a Korean entrepreneur and an ex-IBM employee, has announced its plans to set up an 8 inch (200 mm) and 12 inch (300 mm) wafer fabrication unit near Hyderabad with an consolidated investment of $3.5 billion.

To be set up in two phases, the first phase would incur investments of $1 billion and encompass manufacturing of 8 inch wafers and the second phase will attract $2.5 billion of investments. The state government has already allotted 350 acres near Shamshabad for the proposed unit.
Of the $1 billion investments for the first phase, Min is anticipating 60% foreign equity participation. Intel could be both technology and financial partner according to Mr Min.

Intel primarily manufactures chips that are used in personal computers, laptops and servers. While during its rebranding strategy in early 2006, Intel turned its focus on consumer electronics to retain its market share. And the move to tie up with NTSI that is slated to manufacture chips to be used in computers, television sets, mobiles, DVD players and other consumer electronic devices is believed to be timely for Intel.

The Andhra Pradesh government will pick up a $ 23 million stake in the project. Talks are also on with white goods major Videocon to join in or set up an independent facility.

It is also believed that NTSI is on the verge of finalising companies to build the facility both brick and mortar and in terms of installing the equipment. The production milestones are yet to be worked out, and it is expected that the fab would start manufacturing chips some time in 2007.