The centre approved Hyderabad as the ideal location for setting up SemIndia's Fab City project. The project will be implemented in two phases.

Phase-I of the project entailing an investment of $1-billion with assembly and testing facilities is expected to be operational by early 2007.

The Phase-II of the project with an investment of $2 billion will have the actual Fab facility, which will produce semiconductor chips. The second phase is expected to complete in two years- first year to build the physical infrastructure and the second year to install machinery.

The Government of India is expected to announce a policy with regard to the support needed to the Fab City project offering tax incentives and other facilities on its part. The Centre will also take a decision on the $250-million equity investment by the government as sought by SemIndia.

SemIndia is planning to mobilise 50 per cent investment from its partners and the remaining 50 per cent funds will be raised through debt finance. Besides the chip manufacturing facility, the Fab City will house over 200 suppliers required to make semiconductors. The project is expected to provide nearly 5,000 direct employments in each phase.

APInvest, promoted by the state government, has been acting as a nodal agency for the Fab City project.

Also see:

Karnataka approves Fab City project (09-Dec-05)