Intel to chip in $700-mn unit

Wants free access to ECBs, tax sops on investments.

Intel, the world's largest producer of microprocessors, has proposed to invest $700 million in a wafer testing facility in India if it is given certain concessions by the government.

Intel has asked the government to allow it unbridled access to external commercial borrowings as well as tax sops for the investment which it has proposed to make over four phases, finance ministry officials have said. While the first phase will see an investment of $250 million, Intel intends to invest $150 million in each of the remaining three phases.

The proposal is being pursued by the Prime Minister's Office which has sought the finance ministry's comments. The move comes ahead of Prime Minister Manmohan Singh's visit to the US beginning next week.

According to the Intel website, the company offers six-inch wafers of its 8-bit and 16-bit micro-controllers and embedded processors which help in reducing the size of traditionally-packaged products. The wafers are used in industrial power controls, elevators, thermometers, low-end consumer electronics and communications devices.

The officials said the investment would be announced by the company only after the Centre decided to extend the sops to Intel.

"Some of the benefits sought by Intel are available in special economic zones. But we can't agree to all the sops it has asked for as it will not be fair to other companies," said an official.

Intel has identified a special economic zone near Chennai and another one at Greater Noida near Delhi as possible sites for setting up the facility. According to the officials, the complex was likely to be spread over 125-150 acres.

While high-quality power would be required for the project, officials said the proposal involved very little value-addition in its present form. "But it could just be a beginning and Intel might decide to have a larger presence in the country at a later date," said an official.

The Intel India Development Centre in Bangalore is the company's largest non-manufacturing set-up outside the US.

Plugging in India
Nov '04 Intel chief Craig Barrett talks of India as a possible investment destination

June '05 IT minister Dayanidhi Maran says he has persuaded the chip maker to invest $ 400 mn in India; Intel denies claim

July '05 Maran says clarity to emerge in a fortnight