SemIndia sees AMD equity in Fab project

SemIndia Private Limited chairman Vinod K Agarwal is hopeful of taking the relationship with Advanced Micro Devices (AMD) forward once the semiconductor policy is announced.

Since the company has already signed a memorandum of understanding with AMD towards transfer of technology for its semiconductor unit in the proposed Fab City at Hyderabad, any equity participation commitments from the emerging global player will be determined only after a suitable policy from the Centre is out, Agarwal said while responding to a query by Business Standard.

He said AMD's marketshare gains showcase the prowess of its technology. "We are extremely happy that we have made an excellent selection. Also the process is fine-tuned so we can do a 'copy exact' and avoid any technology risks," he said.

According to him, the largest foundry company in the world, Taiwan Semiconductor Manufacturing Corporation (TSMC), started about 20 years back with a similar kind of partnership (as SemIndia has with AMD) with Philips.

Today, due to proper incentives from Taiwan in these 20 years and also due to TSMC's excellent execution, its annual revenue is close to $10 billion a year and market capitalisation close to $50 billion. This demonstrates what is possible in this area, he added.

On the road map for their manufacturing operations in the backdrop of fast advancements in fabs in terms of power and efficiencies, Agarwal said the only way to manage this dynamics was to work very closely with the customers.

SimIndia's road map was tied to the road map of its potential customers such as AMD and Broadcom, he said.

SemIndia has started phase 1, which is assembly, test, mark and pack (ATMP) project, at Fab City. The company is expecting to start validating the facility for customer qualification and production in 2007.

According to the company's business plan, the ATMP will receive manufactured wafers from other countries such as Taiwan and Germany and will then test and package chips from these wafers and ship them to electronics manufacturers in India and abroad.

Of the total commitment of $100 million for the phase 1 project, $30 million would be in the form of equity and the rest would be raised through bank debt, Agarwal said.