Agreement includes chipmaker's 130-nanometer CMOS Infineon Technologies AG has agreed to license technologies to an upcoming chip manufacturing project in India, the German company announced Wednesday.The deal is a small step forward in India’s efforts to become a center for world semiconductor production. lnfineon will not be investing in the Indian chip project, however, despite efforts by the Indian government to attract outside chip investments in the country.The deal comes two days after Intel Corp. announced plans to build a US$2.5 billion chip plant in China, which is also vying for greater chip manufacturing expertise. Infineon has signed a memorandum of understanding to license the technologies to the Hindustan Semiconductor Manufacturing Corp. (HSMC), a newly established company that plans to set up two chip manufacturing facilities in India.The technologies include Infineon’s 130-nanometer CMOS (complementary metal-oxide semiconductor) process technology, along with technologies for making radio frequency chips and embedded flash chips for smart cards and automotive applications.Infineon will receive revenue from the licensed technologies, a spokesman for the company said. The financial terms are likely to be discussed next week, he said. The 130nm process is a core technology used by Infineon to make chips for a variety of applications, including mobile phones and automobiles, the spokesman said. Infineon is also licensing its design libraries, which will help HSMC to develop products more quickly.The first HSMC facility will require an investment of approximately $1 billion and produce chips on 8-inch wafers. The second facility will cost $3.2 billion to $3.5 billion and produce more advanced 12-inch wafers. The first products from HSMC are expected within two years.The Indian government announced incentives last month for semiconductor manufacturers, including subsidies of up to 25 percent of capital expenditures during the first 10 years of a project. “It is a good start and puts India on the world map as a potential manufacturing location for semiconductors,” Poornima Shenoy, president of the India Semiconductor Association, said at the time. The new policy is only one factor that chip companies must take into account before investing in India, the Infineon spokesman said. Other important factors include quality of infrastructure and the size of the available workforce and market, he said. India’s deteriorating infrastructure is seen by many companies as a major hurdle to large-scale manufacturing.India lacks large-scale, modern chip plants, and mostly operates small fabrication units run by government-owned companies such as Semiconductor Complex Ltd., which uses a relatively old 0.8-micron process technology. Several big companies have chip-design facilities in India, however, including Intel Corp., Infineon and Texas Instruments Inc.Despite the Indian government’s efforts, most of the manufacturing projects announced so far are the initiatives of Indians living abroad. The investor consortium SemIndia announced in 2005 that it planned to set up a testing and assembly operation in India in collaboration with the government and Advanced Micro Devices Inc., which will provide the process technology. The project has been delayed due to a lack of government support and subsidies, however. The estimated cost of the project was $3 billion. “I am hoping multinational companies will also invest directly in semiconductor manufacture in India,” Shenoy said. India has a large domestic market for semiconductors, she added. Technology Industry