Intel plans $500-mn India spend

Barrett to show hand on Monday.

Intel Chairman Craig Barrett is expected to announce an investment of $500 million in India during his one-day visit to the country on Monday.

While half of this investment is expected to flow into Intel's research lab and marketing division, the rest will be used for developing a community personal computer in tie-up with Xenitis.

On Monday, Intel and Xenitis will sign a memorandum of understanding (MoU) for the low-cost PC project. The PC which is likely to be priced at Rs 11,000, would be the cheapest machine with an Intel chip. It will also be available in eight languages including Hindi, Gujarati, Punjabi and Marathi.

The new Intel-powered PC, which will be made primarily for the rural and semi-urban areas of the country, will be a rugged version of the existing computers.

Irregular power supply and lack of proper air-conditioning would be some of the problems that the new product will address. Consumers will also have the option to choose Microsoft software.

At present, Xenitis sells low-cost PCs under brand names like Amar PC and Apna PC, which are powered by Cyrix chips and are sold at Rs 9,999.

"Under the MoU, Intel will make an upfront investment of $250 million for a low-cost PC project," senior Xenitis executives told Business Standard.

Meanwhile, senior government officials said discussions on setting up a fabrication facility, like the one announced by Advanced Micro Devices (AMD) on Wednesday, were unlikely to be taken up.

Intel, which has spent $700 million in the last seven years on its India operations, will spend the bulk of the remaining $250 million on its Intel India Development Centre (IIDC) in Bangalore. It is the company's biggest design centre outside the United States.

The company also proposes to significantly increase the head count at the Bangalore centre from the current level of 2,800 employees.