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Global semiconductor giant Texas Instruments has shelved its plan to set up a microchip assembling unit in India that would have involved an investment of over $1 billion.

The $9.75 billion multinational has finally decided against building the hi-tech facility due to "immaturity of the Indian semiconductor industry and the prevailing US sanctions".

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Recently, several Indian scientists working at the cutting edge of chip technology in various American laboratories were sent home. The action was clearly seen as a bid to deny India select expertise under the anti-nukes sanctions.

Texas Instruments' other reason for rethinking the chip fab, the "immature" industry excuse, is borne out by a Rediff investigation which revealed that the Manufacturers Association for Information Technology's ambition to make India the IT design centre of the world by 2005 is unrealistic.

Texas Instruments India Managing Director Srini Rajam has been quoted as saying that they had "discussions on opening up a wafer fabrication facility in India, and we have put off the idea".

The company is now considering the setting up of a fab only when the industry standards in the country improve and the investment climate becomes conducive, he added.

A semiconductor fabrication plant requires an investment of $1.5 to $2 billion and is the place where all electronic components of a chip are interconnected into a single die of silicon.

Heavy investment is required for a fab because it has to be 1,000 times cleaner than the cleanest hospital operation theatre. The extreme care is required because a single microscopic dust particle can render the entire die circuit useless.

Texas Instrument has been considering India and China for setting up its next fab after it opened its Kilby Centre with an investment of $2.4 billion.

The Kilby Centre is the most advanced silicon research facility that houses some of the company's key research and development activities.

Rajam says the company would, however, invest about $5 million in the next three years, mainly in digital signal processors for which it has already made substantial investments at its Bangalore facility.

The rest of the investment would be in the analogue and ASIC (application-specific integrated circuits) sectors, he added.

He said the company has no plans to extend its arms to or shift its Bangalore facility to Hyderabad.

Texas Instruments has, so far, invested about $20 million in India in various segments of the semiconductor industry. It has also invested in the business of embedded software that is required for various chips and has set up an independent technology park on the outskirts of Bangalore.

Early this year it launched Ankoor, the first digital signal processor designed entirely in India by Indian engineers.

Set up in August 1985, TI India is a wholly owned subsidiary of the Texas based chipmaker.

All software, databases and designs produced by TI India are exported to TI in the US via a dedicated high-speed communications links for distribution.

Related articles:

• Chopping off chips: Seven scientists are expelled from semiconductor labs in the US. How will this impact India's IT-critical future?
• Designer dreams: MAIT has a blueprint to make India the world's leading centre for IT design. But will it fly?
• An interview with Vinod Dham, the father of the Pentium
• Texas is in South India: Ankoor, the latest 'digital signal processor' chip from Texas Instruments was designed entirely in India!

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