The world's second-largest computer chip maker Advanced Micro Devices is planning to invest about $500 million in SemIndia's proposed chip manufacturing facility near Hyderabad.

AMD will invest $500 million in SemIndia's Special Economic Zone for making silicon chips that would require a total investment of up to $3 billion, official sources said. Apart from AMD, Singapore-based Flextronics has already announced it would pick up a minority stake in the venture.

Of the $3 billion investment, $1 billion would come through equity and the rest through debt.

Besides equity, the US chip giant would also provide technology to SemIndia for the manufacturing facility.

Sources said the SEZ scheme has been a big draw among technology companies, with some of the biggest names in the industry either already announcing plans or planning ventures.

Nearly $2-3 billion is expected to flow into these IT SEZs by December 2007, they said.

Flextronics, a contract manufacturer, will also invest $100 million for a 250 acre SEZ at Sriperembudur in Tamil Nadu. Finnish telecom handset major Nokia has already started production at its SEZ in Tamil Nadu, where it will pump in a total of $100 million.

US telecom major Motorola and world's largest computer maker Dell have also plans to invest $100 million each in SEZs in the country. Online search engine Google has lined up an expenditure of $500 million for a SEZ, while Accenture will spend $200 million.