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Semiconductor ind not high priority for govt: AMD
Published on Fri, Dec 14, 2007 at 21:31   |  Updated at Sat, Dec 29, 2007 at 13:48  |  Source : CNBC-TV18

2007 saw some of the biggest international names making an India stopover. Presidents, Prime Ministers and corporate leaders have given India pride of place in their calendars. Deals are being done, dollars are coming in and the hunt for Indian talent continues, reports CNBC-TV18.

 

We finally have a semiconductor policy. But global giants like Intel and AMD have decided to give India a miss. CNBC-TV18’s Shereen Bhan caught up with Hector Ruiz, Chairman of the Board and CEO of AMD, and asked him if AMD will pick up a stake in the FAB unit being set up by SemIndia. AMD is in a transfer technology arrangement with SemIndia, which is setting up a FAB unit in Hyderabad.

 

Excerpts from CNBC-TV18’s exclusive interview with Hector Ruiz:

 

Q: Craig Barrett has been pretty candid about the fact that not much has moved on the semiconductor space. In fact, the semiconductor policy came together after a lot of delays and dithering. Do you share the same opinion?

 

Hector De J Ruiz: Well, I really think there are a number of priorities that the Indian government has. Perhaps, at this point in time, the semiconductor industry is not high enough. It is inevitable that eventually it will be. But today it has not reached that level of intensity or importance to be able to move up the agenda.

 

Q: Is it the policy environment that has probably made AMD look elsewhere and not really focus on India, from an investment point of view, as much as you would have liked to?

 

Hector De J Ruiz: No, I do not think so. I think that policies from the government are good and appropriate. But there is an awful lot more that it takes to build. People talk about semiconductor factories, as being some sort of a highly desirable thing to have.

 

It costs USD 4 billion to build a factory and approximately USD 2 billion more to support it. That is an awful lot of investment. So, you have to be very careful, if that is really what you want to be able to commit to.

 

Q: SemIndia has finally zeroed in on Hyderabad to actually start its FAB unit there. When do you actually see manufacturing beginning?

 

Hector De J Ruiz: I do not know the exact time, because SemIndia is an independent company. We are transferring the technology to them to help them. But I do not know the dates that they are working on.

 

Q: You have only a technology transfer agreement with SemIndia. Are there no plans to pick up a stake? Is that something that you would consider maybe in the future or even now?

 

Hector De J Ruiz: Well, in our industry, you never say never to anything. We do not have any plans right now. But we are very open to learning about what they will do and see if in any way it could benefit us more.

 

Q: Is there a reason that you are holding back investing or picking up a stake there?

A: No, for the next five years we have plans for manufacturing. We have an expansion plans in Germany and New York.

Q: What about expansion as far as R&D is concerned in India? You have set up a center in Bangalore. What kind of investments are we actually going to see coming there?

A: Our investments have been really great in that area. We have one setup in Bangalore, one in Hyderabad and we will have the third one in Bangalore. We are interested in increasing our R&D participation in that part of India. We are very pleased with what we see there and over the next two-three years, we expect to add several hundred more engineers to our ranks.

Q: Several more hundred engineers, several more hundred million dollars possibly as well, could you put a number on the investments?

A: This is about people and at this point in time, that is the only thing that we feel very strongly about in terms of investing in India. So it’s hard to put a number on human capital.

Q: What about globally now because we understand that the 64 processors actually done wonders as far as your concern in competing with Intel and possibly bridging the gap as well, how are things looking like?

A: We are in a very competitive space and we continue to parallel a very tough competitor and we are very fortunate that we put together in the market introductions as you said 64 big technology, very exciting architectures; they have actually changed the nature of industry. To the point of our competitors, they actually have to copy those innovations in order to be able to continue to be strong as they are. We expect it’s going to be different for the next five years, very competitive battle, there are only two players in the world that can do that it; that’s AMD and Intel and we are looking forward to it. 

Q: What sort of a growth projections would you leave us with in terms of how you expect globally and also how would you rank India as an emerging market in terms of your portfolio?

A: The computer technology fortunately is progressive and it is getting more progressive day by day. So we believe that we have a very optimistic view of the growth and we see that getting bigger and bigger for many years to come.

Q: How much do you hoping to gain?

A: A few years ago we are only 10% of the market, today we are about 22-23% of the market. So we have doubled in five years, we expect to continue to gain.

Q: Yesterday in your session, you were talking about how emerging market consumers are actually forcing the companies like yours to innovate. What is going to be the next big wave of innovation that we are likely to see in the business?

A: In our business, the idea of making technology so progressive that you would not even know it is there and you are using it just like you use a telephone. The telephone has become such a commodity to use that people don’t even think about it. So it’s going invade your home, the home is probably the biggest opportunity for us to grow because computer technology has not yet invaded a home and I believe that it is going to change the way people feel about entertainment, about managing the affairs in their homes and we are looking forward to that.

Q: Your number one market at this point in time?

A: If you divide the world into three big pieces, the America, Europe, Middle East and Africa and Asia, the market seems to be divided into thirds.

Q: There are fears of a US economy’s slowdown and of a possible US recession, which side of the camp are you? Do you foresee a forecast a recession or a slowdown at least?

A:  We have to be prepared for any possible changes but at the same time as I mentioned earlier, technology has become so progressive particularly micro computer technology that even in a slowdown, we are seeing the enormous potential for growth and the need for healthcare will continue. So we are optimistic that even in a recession our industry will grow.  

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