Global chip manufacturer Intel will set up its assembly test manufacturing (ATM) facility in India with an approximate investment of $400 million.
Intel has shortlisted Chennai, Bangalore and Noida as possible locations for setting up of the ATM facility.
"The company will be announcing the decision and the location in the next one month, we expect an investment of about $400 million for Intel's ATM facility," Union IT and Telecommunications Minister Dayanidhi Maran said on Tuesday after his US visit earlier this month to woo IT and telecom majors to set up manufacturing base in India.
American mobile handsets and telecom equipment manufacturers, Flextronics and Solectron are likely to follow Intel in establishing manufacturing bases in India shortly.
An estimated $1-$1.2 billion worth of investments are expected to be pumped into India in the coming months by these three companies alone, Maran said.
He said Intel was previously considering China and Vietnam as possible locations for the facility.
"But after my discussion with Craig Barret, the CEO of Intel said they have finalised on India," he said, adding that he was able to impress upon the chip giant to decide on India over China and Vietnam by presenting the country as a booming market with investor-friendly policies.
"The government policy on special economic zones which gives a 15-year tax-free income, market access, policy of the government to promote computers (at present we have 16 million computers and we are aiming at 75 million computers in the next four years) clinched it in our favour," he said.
In addition, UT Starcom, which supplies switches and modems to BSNL, has also shown interest in setting up a manufacturing unit in India, while Cisco is focussing on extending its R&D operations to India, Maran, who returned from the United States on Saturday, said.
Maran also met Cisco chief John Chambers "who has agreed to explore the option to increase the presence of the company in India."
The minister was keen that semi-conductor fabrication units come up in India, which would be a major growth driver for the Indian hardware industry. His idea was that the country should facilitate the setting up of a 'fab city', a concept about which he plans to write to the states.
He had a meeting with world's biggest semiconductor equipment company -- Applied Material -- as well as IBM, India Electronics Manufacturing Corporation and India Semiconductor Association to set up 90nm/65nm fab in India.
If this idea materialises, it alone could bring in investments worth $3 billion to India, he said.
Hector Ruiz, CEO & Chairman of AMD, also had a detailed meeting with Maran where AMD's plans to bring in low-cost computers in India was discussed.