Fab victory

There is lot of euphoria in Andhra Pradesh, particularly in government circles, over the selection of Hyderabad as the location of the $3 billion Fab City for the manufacture of microprocessors and semiconductors. Official drum-beaters claim that Chief Minister Y.S. Raja-sekhar Reddy outbid his predecessor — the IT-savvy N. Chandrababu Naidu — and pulled off a “coup” by snatching the Fab project, billed as India’s first electronic hardware complex, from India’s now-declining ‘Silicon Valley’ — Bangalore.
The new facility, to be commissioned in two years from now, is being promoted by SemIndia, a US-based consortium of Indian origin entrepreneurs, technocrats and angel investors. SemIndia has signed an agreement with Advanced Micro Devices, to license AMD’s process technology for wafer fabrication and assembly-test-mark-pack operations project in India. In June last year, Dr Rajasekhar Reddy had laid the foundation stone for what was also touted as India’s first mega fab project being set up by Nano Tech Silicon India, a company promoted by Dr June Min of Intellect Inc. (South Korea).
The $1.2 billion Phase I of the project was supposed to be ready by September this year. But officials say that Nano Tech project is ‘delayed’ since the promoters are yet to finalise the technology and industrial partners and achieve financial closure. Nano Tech is reportedly wooing Intel to join its proposed mega fab venture though officials say Nano Tech will now join SemIndia’s Fab City. Promoters of the two projects found Hyderabad to be the “best choice” in preference to locations in Karnataka, Tamil Nadu, Maharashtra and even West Bengal and Uttar Pradesh. It was in 1999 that Mr Naidu, then chief minister, had mooted an electronic hardware park near the new international airport project at Shamshabad.
The government identified 5,000 acres of land for this park and announced the electronics hardware policy in 2001 spelling out incentives and facilities for these units. Every year, the State government sponsored IT hardware summits to attract leading MNCs to set up their operations here but without success. In this backdrop, the present hoopla over the Fab project sounds a bit surprising.