Thailand-based Delta Electronics has suspended its $50 million investment in a new Chennai factory intended to manufacture telecommunications and computer parts.

The company, which expects a 20 per cent drop in revenues for 2009, also confirmed plans to downsize operations in Thailand and lay off 400 workers. 

"After finishing a feasibility study, we think that the project is not viable to invest in for the time being given the current market conditions," Delta's executive director Anusorn Muttaraid told the Bangkok Post. However, Muttaraid noted that "it might be feasible" to resume investment at a later date.

According to Muttaraid, the global slump in the electronics industry would continue through the first two quarters of 2009 before leveling out in the third, after which a recovery would occur in the high-end of the sector.

Muttaraid had previously explained that India was a "very promising market" due to its five year tax holiday and 50 per cent tax cut.

"On top of that, India allows 100 per cent foreign ownership, and tax waivers are also available for imported machinery if the plants are located in industrial estates," added Muttaraid.

Delta Power Solutions currently operates two plants in India. The Rudrapur facility in Uttarakhand state manufactures telecom power supplies and UP units, while the Pondicherry plant in Tamil Nadu state produces telecom power supplies and magnetic components. X

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