Real Estate Opportunities in the Semiconductor Sector


Real Estate Opportunities in the Semiconductor Sector
Published on Friday, October 31, 2008

According to Abhishek Kiran Gupta, head, research, Jones Lang LaSalle Meghraj, the demand for industrial as well as office real estate space will be 277.5 million sq. ft. to 333 million sq. ft. by 2010 and 537 million sq. ft. to 644.4 million sq. ft. by 2015

Major players such as Intel, AMD, Analog Devices, NVIDIA, National Semiconductors, ASM, Fairchild and Flextronics have their offices in India. These offices are mostly located at Bangalore, the NCR, Pune and Hyderabad. However, none of these players have fabrication (fab) units in India. At present, most of the fab units in Asia Pacific are located either in China or Taiwan. India has two government-owned fab units. These are Semiconductor Laboratory (SCL) in NCR and Chandigarh, and Society for Integrated Circuit Technology and Applied Research (SITAR) in Bangalore.
According to the India Semiconductor Association (ISA), the Indian semiconductor industry is expected to generate employment for 18.5 lakh employees by 2010 and 35.8 lakh by 2015. The average space required per employee in a fab-manufacturing facility is in the range of 150 to 180 sq. ft. as against the 80 to 100 sq. ft. per employee in the IT industry. This is because the semiconductor industry requires more space to house large machines in manufacturing facilities.
Hence, the demand for industrial as well as office real estate space will be 277.5 million sq. ft. to 333 million sq. ft. by 2010 and 537 million sq. ft. to 644.4 million sq. ft. by 2015, says Abhishek Kiran Gupta – Head, Research, Jones Lang LaSalle Meghraj.

The average space required per employee in a fab-manufacturing facility is in the range of 150 to 180 sq. ft. as against the 80 to 100 sq. ft. per employee in the IT industry

Fab City is India’s first chip-manufacturing facility. It is envisaged as a world-class hub for advanced semiconductor and electronics manufacturing. The government of Andhra Pradesh is promoting this development through public–private partnership. The government has also allocated 1,050 acres of land at Thukkuguda in Maheshwaram Mandal and Ranga Reddy district on the outskirts of Hyderabad for the development of Fab City. Fab City has been notified as an SEZ.
Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is the nodal co-ordination agency for the development of the Fab City project. Advanced Micro Devices (AMD) is the prime investor and principal technology partner of APIIC. AMD is a California-based supplier of integrated circuits for personal and networked computing and communications. Semindia, a US-based consortium of non-resident Indian entrepreneurs, technocrats and investors, is the key developer and investor for the project. Other investors include Base Oxygen Corporation (BOC), Embedded IT Solutions, Flextronics, Hindustan Semiconductor Manufacturing Company (HSMC) and Nano-Tech Silicon India.

The state government allotted land to semiconductor manufacturers for the development of their facilities within Fab City. The state government has committed to install a pipeline with a capacity of 20 million gallons of water per day for multiple fab units and other manufacturing facilities within Fab City. A maximum of 200 MW of electric power with two different grid lines will also be made available. Global industrial gases company Base Oxygen Corporation (BOC) will provide electronic gases and chemicals for Fab City’s advanced manufacturing business units. It will also facilitate the gases infrastructure needed for other manufacturing units that are part of the development. The proposed facility will have the capacity to produce about 30,000 wafers a month. Each wafer will consist of 100 to 1,000 chips.

Fab City is India’s first chip-manufacturing facility, envisaged as a world-class hub for advanced semiconductor and electronics manufacturing

Semindia and Solar Semiconductor have begun their construction works. Solar TF Solar Power and XL Telecom and Energy Ltd are in the initial stages of development. Access roads within Fab City have been laid along with street lights. The road connectivity between Fab City and Hyderabad has also improved considerably this year with the development of Srisailam Highway and NH-7 (Bangalore Highway). Srisailam Highway and NH-7 are the major roads leading to Rajiv Gandhi International

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