MUMBAI Feb 14 India has approved the setting up
of semiconductor wafer plants by two consortia, including IBM
Corp, Israel's TowerJazz and
STMicroelectronics NV, costing a total of 634.1 billion
rupees ($10.17 billion).
India, which wants local production of chips to cut
long-term import bills, has renewed a drive to attract
investments after a previous attempt failed. The two groups had
proposed building plants in India in September.
One of the consortia is made up of India's Jaiprakash
Associates Ltd and TowerJazz and IBM. It plans to set
up a plant near New Delhi at a cost of 343.99 billion rupees
($5.52 billion), a government statement said on Friday.
The second comprises HSMC Technologies India Private Ltd,
Malaysia's Silterra and STMicroelectronics. The group has
proposed investment of 290.13 billion rupees ($4.65 billion) for
a plant in the western Gujarat state, the statement said.
The final agreements for the two plants are expected to be
signed by August.
With a view to attract chipmakers to set up plants in India,
the government is offering concessions including 25 percent
subsidy on capital spending, tax breaks, and interest-free loans
of about 51.24 billion rupees to each plant.
India's demand for electronics products is forecast to rise
nearly 10 times during this decade to reach $400 billion by
2020, causing policy makers to worry that electronics imports,
with no major local manufacturing, could exceed those of oil.