Today in New Delhi, India
Apr 22, 2019-Monday
New Delhi
  • Humidity
  • Wind

?Infrastructure block for investors?

SEMINDIA INC founder president & CEO Dr Vinod K Agarwal feels that no remarkable development has taken place in the industrial sector in Bhopal over a period of three decades.

india Updated: Jan 01, 2006 14:27 IST
Debobrata Ghose
Debobrata Ghose

SEMINDIA INC founder president & CEO Dr Vinod K Agarwal feels that no remarkable development has taken place in the industrial sector in Bhopal over a period of three decades.

The entrepreneur-academic who began his journey from the City’s Sulemania and Cambridge schools, graduated from BITS, Pilani and completed his PhD from John Hopkins University is currently scouting for a right location in southern Indian states to set up a Fab-city.

With his willingness to bring a mega investment of $ 3 bn to India, to set up this ‘ultimate destination for semiconductor manufacturing in India’, he says, “Semiconductor manufacturing is one of the most sophisticated human endeavour and there is no modern unit in India at present.”

In an exclusive interview to Hindustan Times the founder of Logic Vision Inc – a Nasdaq-listed company in the US Dr Agarwal explains that despite wanting to do something for his home state, he finds it difficult to invest due to lack of proper infrastructure, logistics and absence of an international airport in Madhya Pradesh.

“Logistics is the biggest issue in setting up of high capital-intensive semiconductor plant, in which Government needs to be a partner,” he says. Dr Agarwal who was recently in the news, after signing an MoU between his company, Advanced Micro Devices (AMD) and Government of India in New Delhi, citing the example of Andhra Pradesh, Karnataka and Tamil Nadu, Dr Agarwal says mindset and knowledge of both bureaucrats and politicians are equally important, when it comes to mega investments.

“The State Government has failed to create conducive infrastructure needed for industrialisation in Madhya Pradesh, despite making commitments and the system thereby does not allow industries to nurture here,” he lamented.

Also chief advisor to India Semiconductor Association, Agarwal finds India’s ‘Silicon Valley’ – Bangalore, a misnomer, as no hardware manufacturing activity takes place there. SemIndia - a consortium of overseas Indians, sees a huge demand for chips from the country, as the total global market of ‘silicon brains’ is a whopping Rs 11,25,000 crore a year and growing. While, the electronics market based on semiconductors is over Rs 56,25,000 crore.

Citing data, Agarwal says its importance could be ascertained from the fact that India’s consumption of electronics goods based on chips touched Rs 45,000 crore in 2004 and is expected to touch Rs 4,50,000 crore in 2015. “That is, Rs 90,000 crore worth of semiconductors will be used in 2015,” he pointed out.

Out of total chips manufactured in the world, 150 per cent is by Taiwan, Korea and China. “The only way India can stay competitive, is to move into semiconductors and electronic goods manufacturing and leverage its pre-eminence in IT,” he opined.

For the $ 3 bn (Rs 13,000 crore) Fab City project, America’s Advanced Micro Devices (AMD) Inc - the second largest chip manufacturer in the world, after Intel would provide 100 per cent technical support to SemIndia. “They’re our partner and for the first time 100 per cent technology transfer would be made. It is also going for buy-back orders,” Agarwal said.

While, the State Government takes care of infrastructure, Central Government would go for equity investment.
“World over Government support is given to semiconductor industry and the Indian Government is expected to contribute $ 250 million,” he points out.

Expected to be bigger than any industry - even IT - with $ 50 bn production, the initial investment would be made in two phases with $1bn and $2 bn respectively. “With a long gestation period, it would take two years to complete and would provide half-million employment opportunity in 10 years,” says Agarwal, son of local industrialist Madhuri Sharan Agarwal.

What made a professor at the McGill University, with 16 years of teaching experience go for entrepreneurship? He laughs, “My mother had asked me to do something for money and I decided to do something big - this venture.”

Currently, waiting for letters of commitment from three States, proposals would be looked into by an advisory board, to take a final decision, he said. “Now Indian entrepreneurs should leverage on growing India and instead of just going abroad, must look into opportunities that encourage new manufacturing sectors,” is Dr Agarwal’s mantra to upcoming Indian entrepreneurs.

First Published: Jan 01, 2006 14:27 IST