SemIndia looks for new partner

After it's recent breakup with technology partner Advanced Micro Devices (AMD), SemIndia is now scouting for a new partner. The company is in preliminary discussions with chipmakers like Israeli firm Tower Semiconductor but says the process of finding a new partner to invest in India is tough because of the current economic conditions.The Indian start-up had signed a MoU with AMD in December 2005 for manufacturing, technology licensing, and business development to meet the growing demand in the country. But, the agreement has lapsed even as AMD is battling a capex problem and planning to go fab-lite. The delay in the semiconductor policy (announced in early 2007) and lack of presence by any established player had already created doubts in the minds of chipmakers. These firms, now, have other reasons to hold back, including high inflation, elections and the country having no plans for oil prices and related issues.
SemIndia is not the only Indian semiconductor-manufacturing firm, which is finding it tough to get partners. HSMC has signed a technology transfer agreement with Infineon but there has been no progress after that. Other players who are interested in setting up fabs in the country including Reliance Industries, Moser Baer and Videocon, are also unable to get the right partners for technology.
Meanwhile, SemIndia’s investors including Sandalwood Partners, Flextronics and Empire Capital have asked the firm to focus on the ATMP plan at Hyderabad’s Fab City and its systems business.SemIndia MD B V Naidu said the construction of the ATMP is on track after a delay of three months. It is now scheduled to be ready for production in February/March 2009.
Kondamoori said that existing investors have committed capital worth $100 million for the ATMP though talks with some other funds including a sovereign fund from the Gulf region are on.