Air Liquide wins Indian semiconductor gas deal

PARIS, Mar 29 (Reuters) Air Liquide's electronics division is to supply specialty gases for Hindustan Semiconductor Manufacturing Co (HSMC), India's first maker of semiconductors, the French industrial gases said on Thursday.

The agreement makes Air Liquide the first in its sector to deliver gases for the electronics industry in India and requires an investment of 20 million euros (.68 million) for the company, the head of the electronics division told Reuters in an interview.

Air Liquide will supply gases, gas and chemical distribution systems and related services to HSMC's first chip facility where it will make 200 millimetre wafers used in semiconductors.

''India is our first step (for electronics) and it won't be the last one. It already has a network of companies that design chips -- all the ingredients are present to make the it successfull,'' Christophe Fontaine, Air Liquide Vice President of Electronics said.

HSMC's factory will be set up in a yet-to-be created high-tech park in Chennai, Hyderabad or in Bangalore -- the location will be known in several weeks -- providing Air Liquide with opportunities to win deals from other companies.

''The first arriver has the advantage in the future,'' Fontaine said. ''It opens doors for Air Liquide.'' Fontaine added Air Liquide won a yet-to-be disclosed semiconductor gases contract in another major emerging country a month ago. He declined to give more details.

India has been a top country in terms of the design of chips, the manufacturing was the missing part, he said.

With a population of more than 1 billion, India's chip industry is only beginning to develop. Demand for semiconductors is projected to reach billion by 2015, India's ministry for communication and information technology has estimated, riding a boom in electronic goods made in India.

Chips, used in cars, mobile phones or ID cards, are made in a clean or almost dust-free room and the fluids used to help make them are ultra-pure gases like nitrogen, which protects against impurities and oxidation in chip and soldering process.

India and Russia have only recently started making chips. The world's main chip makers are the United States, Taiwan, Japan and South Korea.

''I would not be be surprised if 10 to 15 percent of worldwide semiconductor production would be coming from India in less than 10 years,'' Fontaine said.

REUTERS PV BD1807