For years now, the Indian government has been set on building two wafer fabs in the sub-continent but latest developments show that the project is being put on hold, at least on one front.

Local reports say that Jaiprakash Associates, Local cement and infrastructure company, also the top partner in a consortium with IBM and Tower Semiconductor Ltd. withdrew from its project to build a wafer fab in Greater Noida in Uttar Pradesh.

"JP Associates has withdrawn its proposal of semiconductor plant. They have said that it is not commercially viable to set up this plant at present," Aruna Sharma, secretary of the DeitY (Department of Electronics and IT) of the ministry of communications & information technology, government of India told reporters on the sidelines of a Qualcomm event in New Delhi.

Estimates of the spend on the fab vary from Rs.27,027.03 crore (about $4 billion) up to Rs.33,783.78 crore (about $5 billion) but are somewhat moot as the premise of the projects was that the government would provide funding to subsidise the consortium's plans. Jaypakash Associates was reported to have high levels of endebtedness.

A spokesperson for Tower Semiconductor Ltd. (Migdal Haemek, Israel) confirmed JP's withdrawal in a email response to EE Times Europe.

"Indeed JP has withdrawn their part of out consortium. They had the role of investing money in this project. At this point, we are looking for other investors who may have interest in joining this deal," the spokesperson said. "Nevertheless, [you] need to remember that this deal was never part of our business plan, nor in any of our analysts' models."

The slowness of the Indian government, its lack of ability to raise funds, seem to have blighted both wafer fabs.

By: DocMemory
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