Infineon Technologies AG, Europe's fourth-biggest maker of semiconductors, said it will license its technology to a new chip manufacturer in India, a week after the nation began offering incentives to woo chipmakers.
Infineon signed an agreement with Hindustan Semiconductor Manufacturing Corp, which plans to invest as much as US$4.5 billion in two manufacturing plants in India, the companies said in a statement yesterday.
Hindustan Semiconductor plans to start production at the plants within two years.
Infineon and venture capitalist Deven Verma are likely to invest as much as US$3 billion "within a few years" in the venture, the Mint newspaper reported yesterday, citing a person familiar with the venture who asked not to be named.
The first factory will start manufacturing chips on eight-inch wafers within two years and will require US$1 billion in investment, Verma, who is the chairman of Hindustan Semiconductor, said in New Delhi.
The second plant, for producing chips on 12-inch wafers, will need as much as US$3.5 billion, he said.
The company hasn't selected the location of the factories, he said.
Demand for semiconductors in India is likely to increase to US$36 billion by 2015 from US$3.25 billion last year because of the expanding electronic-goods manufacturing sector, Dayanidhi Maran, India's federal minister for communications, said yesterday.
India's federal government approved a package of incentives for chipmakers, including subsidies for as much as 25 percent of the capital needed for companies in the first 10 years, Maran said on Feb. 22.
The incentives came into effect on March 21.
The companies will need to invest a minimum of 25 billion rupees (US$580 million) to qualify for the incentives for semiconductor plants and 10 billion rupees for manufacturing other products, Maran said.
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