Maraimalainagar(Chennai): SPEL Semiconductors Ltd on Sunday unveiled a Rs 1,280-crore ($286 million) expansion programme that spreads over the next five years. All the expansion would happen in a to-be-formed Special Economic Zone, the company's Vice-Chairman, Ar. Rm. Arun, told a press conference here. The first phase of investments, of $30 million, would happen by the December, 90 per cent of which will be funded through debt.

Of the $286-million investment, $36 million would come from internal accruals. The other $250 million would be raised from the market, which could include equity and preference capital.

Arun said that SPEL Semiconductors, at present, had 22 acres of land, of which its existing facility used only 4 acres. The company intends to buy another 7 acres of land to meet with the regulatory requirement of 25 acres for setting up a SEZ. "We will co-locate related industries in the SEZ," he said.

SPEL Semiconductors turned over Rs 46 crore last year. In the current year, it expects its turnover to grow to about Rs 70 crore.

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Asked if the proposed expansion programme was not too ambitious for a company of its size, Arun said that in the last few years the company had experienced exponential growth. SPEL Semiconductors had already built a name for itself in the growing semiconductor industry, he said. Also, the company was the only one in India and would benefit from the trend in outsourcing assembly and testing of ICs. He said that the lenders were convinced about the company's prospects.

The borrowing programme would be on a single agreement with the lenders but the draw of funds would be phased and linked to the company achieving agreed milestones.

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The company also announced the launch of a new facility that can assemble `integrated circuits' in a hi-tech package. ICs assembled using the `lead-less moulded package' technology would not have leads - the pin-like legs - sticking out of them.

The main advantage of this type of packaging is that the ICs would be much smaller - they use much less `real estate' on the printed circuit boards.

Therefore, the devices using them, such as mobile phones, iPods, PDAs, could also be made much smaller.