IBM and ST Microelectronics’ chip FAB units costing $8 billion to create 22,000 direct and 1 lakh indirect jobs

Telecom and IT minister Kapil Sibal on Friday said IBM and ST Microelectronics’ semiconductor FAB units costing around $8 billion will create 22,000 direct and 1 lakh indirect jobs in India.

In addition, electronics production will get a significant boost as the India government approved two semiconductor wafer fabrication (FAB) manufacturing units. IBM and ST Microelectronics are part of these two consortiums which will be investing around $8 billion (Rs 51,550 crore) in two facilities.

It is expected that the semiconductor wafer FABs will stimulate the flow of capital and technology, create employment opportunities, help higher value addition in the electronic products manufactured in the country, reduce dependence on imports and lead to innovation.

Jaiprakash Associates and Tower Jazz of Israel are IBM’s partners.

Telecom and IT minister Kapil Sibal

They will invest around Rs 26,300 crore for establishing the FAB facility of 40,000 wafer starts per month of 300 mm size, using advanced CMOS technology. Technology nodes proposed are 90, 65 and 45 nm nodes in Phase I, 28 nm node in Phase II with the option of establishing a 22 nm node in Phase III.

The unit of IBM and its partners will come up in Noida, Delhi-NCR.

ST Microelectronics’ partners are Hindustan Semiconductor Manufacturing Corporation and Silterra of Malaysia.

They will invest around Rs 25,250 crore for the fab facility of 40,000 wafer starts per month of 300 mm size, using advanced CMOS technology. Technology nodes proposed are 90, 65 and 45 nm nodes in Phase I and 45, 28 and 22 nm nodes in Phase II.

The FAB unit of ST Microelectronics consortium will be in Gujarat.

The Government has approved setting up of two Semiconductor Wafer Fabrication (FAB) Manufacturing Facilities in the country. These FAB facilities are expected to provide big boost to the Electronics System Design and Manufacturing eco-system in the country.

India has also approved incentives including incentives already available under the Modified Special Incentive Package Scheme (M-SIPS) and deduction available for expenditure on R&D under the Income Tax Act. In addition, FAB facilities will also be eligible for investment linked deduction under Section 35AD of the Income Tax Act. The Government will provide Viability Gap Funding (VGF) in the form of an interest free loan for a period of 10 years.

Technology providers will pick up at least 10 percent equity in the proposed projects. The Government will have 11 percent stake.

editor@telecomlead.com

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