Hindustan Semiconductor Manufacturing Corporation (HSMC) on Wednesday signed an MoU with the world’s fourth largest semiconductor supplier, Infineon Technologies AG. Through this technology partnership, the company mulls to invest $4 billion to set up two chip manufacturing plants in India.

Infineon will license its 130-nanometre CMOS process technology and also offer expertise and advice for technology transfer. The MoU will build a foundation for the production of integrated circuits for mobile phones, ID cards and automotives. “With this cooperation, we position ourselves as a reliable partner for the prosperous Indian semiconductor market,” said Dr Wolfgang Ziebart, CEO, Infineon Technologies.

While debut products are expected within two years, investment for the 10 foundries capacity fab will be spread over the next 7-8 years. The group is yet to decide the location for the project, and is in talks with various investor groups.

Dr Wolfgang Ziebart, CEO, Infineon Technologies spoke to Aakansha Sethi about the company’s India outing:

Why are you coming as technology partners with HSMC in India? Why not invest independently?

It would give us better access to the local industry. The idea is to penetrate the Indian market. We are relying on people who know the market here.

You have cultivated your business in Taiwan very deeply, do you see India becoming a market like Taiwan?

In Taiwan we penetrated through local activities like acquisitions. There are no manufacturers in India to acquire right now.

So are acquisitions of chip design companies on the cards?

No, however, we would be expanding our existing facility in Bangalore.