Reliance investing USD 7.5 bn for 2 microchip units

http://news.in.msn.com/business/article.aspx?cp-documentid=1322578

New Delhi: The Mukesh Ambani-led Reliance Industries, a giant in areas ranging from oil exploration to petrochemicals, proposes to invest $7.5 billion over the next 10 years to set up two microchip manufacturing units in India.

The first unit with an investment of $2.9 billion will come up in Jamnagar in Gujarat to make solar-grade polysilicon ingots and is expected to generate employment for 11,000 people, a communication ministry statement said here Thursday.

Location of the second facility has not been finalised, as it will depend on the type of incentive offered by the state government. However, it is expected to employ 4,000 people, the statement said.

"The company would locate this facility at Navi Mumbai, Hyderabad, Mysore or Haryana," the statement said, adding the investment proposed in this unit is estimated at $4.6 billion.

The country's semiconductor policy was announced last year and offers a host of fiscal incentives to develop India as a major hub in the area. The government has received investment proposals worth Rs.650 billion so far, including that of Reliance.

Some other companies that have submitted proposals to set up semiconductor units include Videocon Industries that has plans to invest Rs.80 billion ($2 billion) in Navi Mumbai and Moser Baer with Rs.60 billion ($1.5 billion) near Chennai.

Signet Solar has also planned to invest close to Rs.100 billion ($2.5 billion) in Tamil Nadu. The other companies include Titan Energy and KSK Energy Ventures, the official statement said.

"Under a special incentive package scheme, the central government has to provide an incentive of 20 percent capital expenditure during the first 10 years for units in special economic zones (SEZ) and 25 percent of the capital expenditure in non-SEZ units," it said.