Project Progress

The strategic and policy developments effecting Fab City.

Date Milestone/Event
13 October 2007 The State of Andhra Pradesh creates a special purpose vehicle for Fab City, which has been awarded the status of special economic zone (SEZ) with Andhra Pradesh Industrial Infrastructure Corporation Ltd (APIIC) becoming the nodal agency for clearances.
02 October 2007 Cabinet ratifies the MoU entered between the state government and the semi-conductor manufacturing Fab City project on February 2, 2006. The Cabinet has also ratified the orders issued by the government extending various incentives and concessions to establish Fab City. The government has nominated three government officials on the board of Fab City to oversee the implementation of the project.
17 September 2007 Guidelines for the semiconductor manufacturing policy issued
July 2007 Building to begin on Phase 1 of Fab City in July 2007 and due for phase completion in 8 months.
21 March 2007 Indian government notify the semiconductor policy.

The policy it expects to attract an investment of $6-10 billion (Rs.24,000-44,000 crore) by attracting two or three fabrication units, with an investment worth $2-3 billion each, by 2010.

An Appraisal Committee will be formed to receive expression of interest from interested parties and submit its recommendations to the government.

Projects already announced include SemIndia ($3 Bn), Moser Baer & Videcon ($250 Mn each), Freecale Semiconductor & Cypress Semiconductor ($50 Mn each).

The Indian domestic market for electronic goods is expected to reach $363 billion by 2015 and the domestic demand for semiconductors alone is predicted to touch $43 billion.

22 February 2007 Indian government announces awaited semiconductor policy.

Manufacturing plants in SEZ’s (special economic zones) can avail 20% subsidy for semiconductor plants and those outside the SEZ’s can avail 25% subsidy.

This subsidy will be in the form of tax concessions, interest subsidy and interest free loans for subsidizing the capital expenditure incurred in setting up the manufacturing units for the first 10 years of its existence. The plants will be able to enjoy the tax benefits until March 31, 2010

For semiconductor manufacturing, the minimum investment for availing the incentives has been pegged at Rs 2,500 crore ($513.3 Mn), while the threshold for other products like liquid crystal displays(LCDs), organic emitting diodes, plasma display panels, storage devices, photovoltaics and other advanced micro and nano technology products and assembly and testing is Rs 1,000 crore ($205 Mn).

17 February 2007 SemIndia and the government of Andhra Pradesh enter into a memorandum of understanding (MoU).
11 January 2007 India’s Semi Conductor Policy discussed and approved by Cabinet. The government has identified the semiconductor industry as high priority.
10 November 2006 IMEC of Belgium signs MOU with SemIndia for manufacturing 90 and 130nm chipsets at Fab City Hyderabad, in the presence of Belgian PM and India Finance Minister Mr. Chidambaram.
23 June 2006 Fab City foundation stone laid by Chief Minister Dr.Y.S.Rajasekhara Reddy.
7 June 2006 Base Oxygen Corporation (BOC) becomes a strategic partner.
4 April 2006 Flextronics Inc becomes a strategic partner.
10 February 2006 Announcement – Hyderabad gets India’s first micro-processors and silicon chips manufacturing facility for the IT industry.
30 November 2005 SemIndia enters into a partnership with Advanced Micro Devices (AMD) in New Delhi.

In the presence of Dayanidhi Maran, India’s IT and communications minister – Vinod Agarwal, chairman, president and chief executive officer of SemIndia and Hector Ruiz CEO of AMD signed an agreement that will allow SemIndia to license AMD’s process technology for the planned fabrication, assembly, and testing operations.

AMD and SemIndia will also jointly develop and market semiconductor products for India. Fab City will make chips using 65 nanometer and 90 nanometer technology.