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Usha may make Motorola semiconductors

The company plans to crate an annual production capacity of 400 million transistors that will be used in the manufacture of computers, telecom, audio and video equipment, Arun Kanchan, director, Usha Group, has said.

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"We are negotiating with leading semiconductor multinational corporations, including Motorola, for procurement of an assembly line for producing surface mount devices and will focus primarily on exports," Kanchan said.

Usha (India) is seeking to become a subcontractor to one of these MNCs for manufacturing integrated circuit packages and electronic components.

It already has a seven-year contract with Samsung Electronics since 1996 for manufacturing and supplying small signal transistors.

Usha is also planning to set up an 'Epitaxi' plant for manufacturing wafers, an input for producing chips used in consumer electronics like toys, cellular phones and other professional electronic items like computer.

Negotiations are also on with a Swiss company involving an investment of between $8 million to $10 million for becoming a subcontractor by setting up an assembly line for electronic components, Kanchan said, adding that proposal is in the process of financial closure.

Asked about further extension of Usha (India)-Samsung tieup for manufacturing and supplying small signal transistors after three and half years, when the seven-year contract comes to an end, Kanchan said the major issue is prices and that would be negotiated only at the end of the contract.

Samsung, according to sources, has indicated that prices should be fixed after taking out the financial cost to an extent of 25 per cent, as the financial cost will become zero after the contract period is over.

About the financial performance of the company in the current financial year, Kanchan said Usha (India) is expecting a growth of 15 per cent this year, adding that most of this growth would come from exports that saw an increase of 30 per cent in last two years.

Meanwhile, the company has exported the largest consignment of 50 million small signal transistors to Samsung in Korea for December 1998 under its seven-year contract with the foreign partner.

The export order is worth $575,000 and is the largest export order in the semiconductor industry exported from India so far, Kanchan claimed.

- Compiled from the Indian media

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