The Telegraph
Since 1st March, 1999
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Intel chips in minus chip

New Delhi, Dec. 5: Intel chief Craig Barrett today announced a $1-billion investment in India over three years.

The money, however, has not been committed to manufacturing, an area in which rival AMD has promised a semiconductor fabrication unit with a local ally.

“The focus of our investment will be on innovation, venture capital funding, teachers for future programme and our volunteer funds,” the Intel Corporation chief said.

Barrett said there was need for India to improve its infrastructure if it wanted an Intel unit. He also ruled out technology transfers for a semiconductor fabrication plant. “We built our plant in China, not in India. The reason was that China as a country had developed its manufacturing and utility infrastructure. These included transportation systems and customs procedures for easy movement of products in and out of the country.”

Barrett said his company was still in discussions with the government on the manufacturing options but made it clear he had nothing at the moment to announce.

He cited low corporate taxes and infrastructure as key elements that would influence the decision to set up a manufacturing base. “A lot of our business is capital intensive, tax rates are as important as wages, especially in areas such as wafer manufacturing. States that want us to set up manufacturing bases must realise this,” said Barrett.

He scoffed at AMD’s announcement last week to transfer technology to SemIndia for manufacture of semiconductors. Barrett said it was “merely a technology transfer to someone who was willing to bring in $3 billion. Intel does not follow that business model”.

The issue was also highlighted in meetings Barrett held with communications and information technology minister Dayanidhi Maran and finance minister P. Chidambaram.

Intel will invest $800 million in its Bangalore research facility, where it has already sunk in $700 million. Barrett said there has been a shift in the hub’s specialisation from software engineering to hardware design, especially those that go into the making of microprocessors.

“We are working with our Bangalore design group, which devises computer platforms for India. These are rugged ones that can work in rural markets, can absorb moisture, dust and rain, and can even be used with car battery. We are also focusing on portable low-cost PCs,” Barrett said.

The Intel chief, who was on his seventh visit to India, said the company added more than 1000 professionals at Bangalore, taking its total strength close to 2,800.

Intel will focus on innovation, through investments in research to promote the concept of “created in and exported from India”. It plans to make funding more competitive to other industries in India through its $250-million Intel Capital India Technology fund.

Arvind Sodhani, president of Intel Capital said: “It is an India-dedicated fund. We have invested more than $100 million in 40 start-up companies in India since 1998 like Sasken, Rediff, Futuresoft, NIIT and Tejas networks.”

The venture funding will be channelled into cellular firms, broadband applications, wireless technologies, software and hardware design as well as internet. “Our quantum of fund tends to be between $2-5 million,” said Sodhani.

Intel funds new ventures heavily in the emerging markets and high-growth economies of the world like Russia, India, China, Eastern Europe and Latin America.

In another ground-breaking initiative, the global chip giant has promised training for five lakh teachers in IT over the next three years across various states. It has already groomed as many of them under its learning plans.

Under its learning programmes, Intel encourages young children to use information technology in community centres and other places. It focuses on how to use technology in problem solving and to connect with others. The pilot project, launched last year in two states, will be extended to more areas in the next three years.

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