It seems that Infineon has solved a number of challenges with its deal in India. Challenge No.1: How to get fab after its current fab stable obsoletes? Challenge No, 2: How to get into new markets? Challenge No.3: How to expand its manufacturing capability?
By going in with the Hindustan Semiconductor Manufacturing Company to provide its process technology and fab-building expertise to the setting up of ten fabs in India, Infineon will be in pole position to see its products designed into the new generation of India-produced, inexpensive electronic goods.
India expects its internal sales of electronic goods to increase by 10X in the next ten years, reaching $363bn by 2015, for which the semiconductor content will be worth $36bn.
Either these goods can be bought from overseas, or they can be made in India using foreign-built ICs, or they can be made in India using Indian-built semiconductors. Clearly it's better for India to do everything locally.
The first fab Infineon will help build will be a 200mm 130nm fab costing about $800m to be running by 2009. The second fab will be a 300mm 90nm fab. "The other eight fabs will be announced later", said the spokesman. All will be announced by 2010.
The Indian government recently announced a support scheme for semiconductor manufacturing under which the government pays up to 20 per cent of a project cost through equity participation, tax breaks or other financial incentives.
At first the fabs won't offer technology beyond what Infineon already has but, as they go down the micron trail, their capability will become leading edge and, at that point, Infineon can probably cut a very good foundry deal.
A good deal for India, a good deal for Infineon, and a boost for the semiconductor business and all its related industries.
TOMORROW: TEN BEST CHIPS EVER BUILT
Subscribe to this blog's feed