SemIndia ropes in Flextronics for fab Singapore-Based Firm Picks Up 5% Stake In The Project For About $ 50-Mn TIMES NEWS NETWORK
Hyderabad: At a time when the ability of SemIndia in executing the much-hyped fab city project is being questioned, the Vinod Agarwal-led consortium has entered into an agreement with Flextronics. Apart from the product supply agreement, Flextronics will also pick up minority stake in $3-billion project of SemIndia.
Flextronics did not say how much it would invest in SemIndia but sources familiar with the plans said the company might pick up about 5% stake as one of the several strategic partners for about $50 million, to begin with.
Headquartered in Singapore, Flextronics is a leading electronics manufacturing services (EMS) provider focused on delivering complete design, engineering and manufacturing services to aerospace, automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs. The company had a revenue of $15.9 billion in fiscal 2005.
As per the agreement, which was signed in the presence of union IT minister Dayanidhi Maran in Delhi on Tuesday, Flextronics will become a preferred manufacturing partner for SemIndia. "This agreement marks a partnership that will create India's first comprehensive ecosystem necessary to excel in electronics products manufacturing in the country. Under this strategic partnership, Flextronics will manufacture electronic products for SemIndia and the latter will manufacture semiconductor chips for various product categories that Flextronics manufactures in India. These include chips for cell phones, set-top boxes and personal computers among others," a joint statement of both the companies said.
"Our increasing presence in India plays a significant role in Flextronics' growth strategy," Peter Tan, president and managing director, Flextronics Asia, said in the statement. He added, "we are confident that this partnership will result in significant benefits to Flextronics' overall business in India. Our partnership with SemIndia builds on our existing multimillion dollar investments in the country. This initiative reaffirms our steadfast commitment to the India marketplace and reiterates our aim to further advance the electronics manufacturing industry in India."
SemIndia has been working on a plan to rope in atleast three strategic partners to take the fab city project forward. Though the details of the other partners are being worked out, Advanced Micro Devices (AMD), the Andhra Pradesh government and the Government of India have expressed their willingness to participate in the equity of the first-ever mega semiconductor project.
New Partner
Flextronics becomes a preferred manufacturing partner for SemIndia.
Flextronics will manufacture electronic products for SemIndia
SemIndia has been working on a plan to rope in atleast three strategic partners to take the fab city project forward
Chief minister Y S Rajasekhara Reddy (second from right) and Union minister for communications and IT Dayanidhi Maran (second from left) with SemIndia chairman V Agarwal (right) and Flextronics Asia MD Peter Tan after signing the MOU in New Delhi on Tuesday.