Semiconductor policy likely this month  

BANGALORE: The semiconductor industry in India has been waiting with
anticipation for the announcement of the semiconductor policy since February,
when finance minister P Chidambaran mentioned it in his budget speech. 

However, the policy has seen delays due to a stalemate between the Finance
and IT ministries on the issue of the fiscal incentive package for investors
setting up fab units. According to sources, the finance ministry is wary about
incentives, since the returns from investments in the fab projects take a long
time, at least around eight-nine years. 

The deadlock forced the IT ministry to shoot off a letter to the Prime
Minister's Office last month. Now, it appears that the two ministries have
sorted the differences and, if all goes well, the policy could be announced
sometime this month. 

Speaking to CyberMedia News, Rajendra Khare, chairman, Indian Semiconductor
Association (ISA), said that investors are delaying their India fab plans so
that they could avail benefits from the policy. 

“There is tremendous anxiety and also disappointment that the center has
been slow on the policy announcement. Nowhere in the world has the fab industry
come up without government support,” said Khare. 

Some of the incentive demands that ISA had put forth include reduced tax and
duties for critical items, development of physical and telecom infrastructure. 

Among the main projects waiting in the wings include the $3 billion SemIndia
project in Hyderabad that proposes 200-mm and 300-mm wafer fabrication
facilities based on technology from Advanced Micro Devices (AMD) and an
assembly, test, marking and packaging plant. 

Khare said that the ISA has instituted “Techno-vision Awards” to
recognize achievers in the Indian semiconductor sector. These awards would be
presented during the ISA's Vision summit in February 2007.