Koreans to set up $1.6 bn chip plant in Hyderabad

The government is in the final stage of negotiations with the Korean company and expects the ground-breaking ceremony to take place soon, Reddy said. “We try to promote both software and hardware and the new hardware project will pave way for AP’s focus on promoting hardware too in a big way,” he added.

Giving more details, the state’s joint director (promotion), IT and communications department C.K. Veeresh said the Korean company, promoted by June Min, former vice-chairman of Daewoo Corporation and former senior MD of the LG group, has already set up four similar fabrication plants in China and Taiwan.

To be set up as India Semiconductor Manufacturing Company (ISMC), the Korean company has proposed to invest $600 million in phase I and another $1 billion in phase II.

“We are in the final stages of negotiations with the Korean company and hope the construction work will begin in 2005,” Veeresh said. Commercial production, if it goes as per schedule, will begin by 2006-end or early 2007, he added.

The project will be developed in joint collaboration by Intellect with the world’s leading hardware firms, chip manufacturers and telecom majors and financial institutions for technical and financial collaboration, Veeresh added.

Coming up in an area of 50 acres near the proposed international airport at Shamshabad in Hyderabad, and expected to provide direct employment to 10,000 people, the company will manufacture chips for SIM cards, micro processors and other applications, including telecom.

Based on the firming up of ancillary units around the fab, the total employment will go up further, he said.

The project will be a unique one, the technology and chips have value for over 10 years and are expected to have mass consumption at all levels, he added.