India wants Intel chip plant

The country's IT minister is set to meet with Intel's top brass to encourage chip giant to choose India over China.

Reuters

June 2, 2005 1:00 a.m. PT

India's information technology minister will travel to the United States this month to meet the top brass of Intel to encourage the computer chip giant to choose India over China for its new factory.

"I'll be going to the U.S. in the last week of this month to convince Intel to set up the next factory in India," Dayanidhi Maran told reporters Tuesday.

Intel Chief Executive Craig Barrett said on a visit to India late last year that the country was among several short-listed for the new chip manufacturing facility.

Santa Clara, Calif.-based Intel already has a development center in India's technology capital, Bangalore, which designs and develops software to power chips that drive computers and high-end networks for Internet-based applications.

Over the past year, Maran has been aggressively lobbying companies to set up manufacturing units in India.

While India's software skills are widely recognized and companies such as Motorola have set up large units to outsource software services, the country is still not considered a world-class manufacturing destination due to its creaky infrastructure and restrictive labor laws.

There are no chip manufacturing units in the country.

But the tide is turning, and companies such as Nokia and LG Electronics are investing millions of dollars to set up mobile handset manufacturing plants in India to cater to growing demand in Asia's fourth-largest economy.