For Taiwan’s famed chipmakers, champions of the high volume-low cost game, Bangalore appears a trifle too expensive for setting up manufacturing units. Instead, Taiwanese companies are scouting around for locations in Chennai and Hyderabad.

“Bangalore is an information technology hub, but it is as costly as Taiwan. In comparison, Chennai and Hyderabad are cheaper and good for setting up chip manufacturing units,” Taiwan Semiconductor Industry Association President TY Wu said.

He recently led a delegation of Taiwanese semiconductor industry executives on a visit to India.

TY Wu felt that though Taiwan had the required technology, it lacked chip design skills, something available in abundance in India.

“The two cities provide better infrastructure for packaging, system assembly, and system integration. Various chip manufacturing units can be set up at the SemIndia facility in Hyderabad, and the semi-conductor SEZ coming up in Chennai,” he said.

Windbond Electronics Corp, a Taiwanese company that was a part of the delegation, has had talks with two Chennai-based companies — Spel and Tessolve — for integrated circuit backend production, and very large scale integration design.

“Our plan is to outsource integrated circuit backend production to India. We are looking for partners for engineering co-operation, sales, and marketing in Chennai and Hyderabad,” said James P M Chen, Windbond vice-president (sales).