NeST plans $5b semiconductor unit in Kerala

HYDERABAD: With the Centre giving in-principle nod for the proposed semiconductor policy, US-based Network Systems and Technologies (NeST) has expressed its willingness to set up a fab in Kerala. NeST chairman Javed Hassan is in talks with the Kerala government. He has also reportedly roped in partners for the project.

"They are waiting for the semiconductor policy announcement. Once the policy is out, they will be able to prepare a concrete business plan. The investment is expected to be in the range of $3 billion to $5 billion," a Kerala government official told ET.

He said the project will be located in Kochi. Mr Hassan was earlier keen on locating the project near the proposed international airport in Bangalore. However, he was drawn to Kerala due to availability of water and power, the official said.

"We will be able to provide them quality power and de-ionised water, key requirements of a fab. A $320-million LNG terminal is coming up in Kochi and it will be ready by 2008.

The government is also in talks with the Oman government and companies for gas supply. This will help us to generate the required power," he added.

NeST has partnered Fujitsu and Hitachi for embedded systems development and other services. It is understood that these technology tie-ups could be extended to the proposed fab city project.

The first fab project in India, Nano-Tech Silicon India, is haunted with various problems and is yet to take off. Nano-Tech Silicon, which conducted its ground-breaking ceremony in June 2005 with much fanfare, is yet to make any progress in terms of financial closure and infrastructure development.

"We are waiting for the announcement of semiconductor policy. Besides, power crisis faced by the state (Andhra Pradesh) is also a big problem.

In 2004, the state government had promised us 400 MW power at Rs 1.85 per unit against an industry rate of Rs 3.56 per unit, helping us to save over $6 million," said June Min, chairman & CEO of Nano-Tech Silicon India, told ET.