AMD may build a chip plant in India, Ruiz says

Advanced Micro Devices (AMD) is warming to the idea of building a chip manufacturing
plant in India, which would be a significant breakthrough for the country's
high-tech ambitions.

Several of the world's top chip vendors, including AMD, Intel and Texas Instruments,
have set up chip design facilities in India. But the country does not yet have
a state of the art chip manufacturing plant. Intel said earlier this year it
had decided against setting up such a plant, because the Indian government was
slow to articulate its policies for the semiconductor industry.

Hector Ruiz, AMD's chairman and CEO, was in India Thursday to announce the
opening of a new, 52,000 square-foot AMD design facility in Bangalore that will
house up to 350 engineers. The company has outgrown its previous design facility,
which opened in 2004.

Ruiz said at the event that it is critical to have manufacturing operations
in close proximity to research and development. "A fab in India is under
consideration," he said.

AMD's chip production efforts in India have been limited so far to its involvement
with SemIndia Inc., a consortium of investors that plans to set up a wafer fabrication,
and assembly and test operation in India.

AMD said in 2005 that it would transfer some of its manufacturing process technologies
to SemIndia, but that project has been delayed, in part because the Indian government
was slow to announce its semiconductor policy and a package of incentives for
the chip industry. Both were finally announced earlier this year.

The partnership with SemIndia will help AMD to test the waters in India and
better understand its regulations and policies, Ruiz said. The company will
continue to work with SemIndia before making a final decision as to whether
to set up its own fab, he said.

Along with the design operations in Bangalore, AMD also has a design facility
in neighboring Hyderabad, which became part of the company when it acquired
ATI Technologies last year. AMD will continue to increase the number of design
engineers it has in India, Ruiz said.