Key Facts

  1. February 2006, Fab City project announced.
  2. Three states were shortlisted to host Fab City; Andhra Pradesh, Karnataka and Tamil Nadu.
  3. Hyderabad was selected because of its weather, roads, availability of a semi-skilled work force, electricity, water and proximity to an international airport.
  4. Fab City is 40km from Hyderabad city center.
  5. Fab City is 7km from the new Hyderabad International Airport
  6. Fab City will be given Special Economic Zone status.
  7. Fab City will be located on 1,200 acres of land to be given by the Andhra Pradesh government at Thukkuguda, in the Maheshwaram mandal near Shamshabad.
  8. Fab City will create 5,000 jobs by 2009 and up to 1.4 million jobs by 2016 in 200 ancillary industries.
  9. The state authorities have been directed, by central government, to launch work on an eight-lane outer-ring-road from April. The 162-km road, at an estimated cost of Rs.30 billion ($675 million), will be developed along with satellite townships.
  10. The upcoming $320 million Hyderabad International Airport, 20 km from city and 7km from Fab City, is being built by a consortium of construction major GMR Infrastructure Ltd and Malaysia Airports Holding Berhad (MAHB).


    • The first phase of the international airport, on 5,400 acres of land, will become operational by March 2008 and will have a runway 4.26 km long.
    • Though the first phase of the airport was originally scheduled to provide for a capacity of five million passengers annually, the fast pace of development and air traffic have forced the developers to increase it to seven million.
  11. The state authorities have offered to supply 50 million gallons of water a day and build a dedicated 600 MW power project for Fab City. The electricity will be supplied at a cost of Rs.2.25 per unit.
  12. Fab City is an initiative of the government of Andhra Pradesh (GoAP) and is being lead by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC). APIIC aim is to attract companies, involved in the various aspects of semiconductor design and manufacturing, to Fab City. APIIC terms these investors – co-partners. The first co-partner to commit to Fab City is SemIndia and its technology partner Advanced Micro Devices (AMD). A SemIndia subsidiary, SemIndia Systems, will undertake design-related work for chips that may manufactured at Fab City. SemIndia has bought a stake in the Bangalore-based chip design firm Xalted.
  13. The first Fab City development will be by SemIndia. Semindia entered into a partnership with AMD in New Delhi on 30 November 2005 during the visit of AMD CEO Hector Ruiz to India.
  14. SemIndia is a US-based consortium of non-resident Indian entrepreneurs, technocrats and investors.
  15. The Semindia development at Fab City will be executed in two phases:


    • The first phase (06/07) involves investment of $1 billion, this is the assembly, test, mark and packaging (ATMP) phase and is expected to be completed by mid-2007.
    • The second phase (07/09) involves investment of $2 billion, starting with the construction of the actual chip manufacturing facility, known in the trade as a fab, and leading to the production of semiconductor chips. This phase will take two years to launch, the first year to build the physical infrastructure and the second year to install machinery.
    • The buildings will come up in the first year followed by the installation of the equipment in the second. The job creation will gather force in the third year, with about 5,000 people streaming into the facility.
  16. Of the $3-billion proposed investment, $1.5 billion will be debt, raised against capital equipment and the balance ($1.5 billion) will be invested by SemIndia founders, partners like AMD, strategic customers, venture capitalists, state and central governments.
  17. The proposed facility will have a capacity to produce about 30,000 wafers a month. Each wafer will consist of 100-1,000 chips.
  18. SemIndia has enlisted the services of two Singapore-based firms – Jurong and Serbana – as master planners for the project.
  19. Unlike the IT industry, where 80 per cent of the requirement is of skilled workers, chip manufacturing needs only 20 per cent skilled workers.
  20. Besides the chip manufacturing facility, the Fab City will house the more than 200 suppliers required to make semiconductors.
  21. India Semiconductor Association release a study in February 2006 predicting the semiconductor and embedded design market in India will grow from $3.25 billion currently to $14.42 billion in 2010 and $43.07 billion by 2015.
  22. India Semiconductor Association study suggests the consumption of electronic goods was estimated at $28.2 billion in 2005, and is expected to reach $128.7 billion by 2009 and $363 billion at 2015, with a compounded annual growth rate of 29.8%.