Home/ Technology / News/  Global chip giants eye India presence

New Delhi: Major global semiconductor companies have evinced interest in India’s ambitious semiconductor programme and are likely to formally express interest in the near future, people familiar with the developments said. Announcements in this regard could come as soon as next week, they added.

This will likely widen the field in terms of contenders for more than $10 billion in federal and state subsidies, apart from other benefits, that India has announced to attract semiconductor manufacturing. While three contenders are part of an ongoing evaluation process, the window that was deemed to have closed to be eligible will likely be opened again.

The government’s efforts to attract global semiconductor companies have yielded results, with the minister of communications and information technology, Ashwini Vaishnaw, who returned after spending three days in Silicon Valley and met with more than 60 companies in the semiconductor space, saying he saw huge interest.

“There’s huge confidence about India’s semiconductor programme. We have received interest from a number of large players. The entire ecosystem wants to come to India," Vaishnaw, who is also the railways minister, said.

The government believes it has the right combination of facilitating factors, including financial incentives, high-quality talent, investments in infrastructure and favourable policies for attracting large investments not only in core chip manufacturers but also in ancillary units that make up the industry supporting chip manufacturing, which will attract players from all segments.

The government has also decided to keep open the $10-billion financial incentive scheme with a 50% subsidy on investments for making semiconductors in India for potential applicants, according to a Bloomberg report, even as it continues to evaluate three proposals submitted under the previous window by Vedanta-Foxconn JV, International Semiconductor Consortium (ISMC) and Singapore’s IGSS Ventures. The scheme was announced in December 2021.

This comes at a time global chip majors such as Intel, TSMC, and Global Foundries are being wooed by several countries.

Anil Agarwal-promoted Vedanta Resources, in a joint venture with the world’s leading contract manufacturer Foxconn, plans to set up a display fabrication unit, integrated semiconductor fabrication unit and outsourced semiconductor assembly and test facility with an investment of $20 billion, in Dholera, Gujarat.

ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor, which Intel Inc acquired in February last year. The ISMC consortium signed an MoU with the Karnataka government for a $3 billion fabrication plant in Mysuru, where it has sought 150 acres at Kochanahalli industrial area.

Singapore-based IGSS Ventures Pvt. Ltd signed a memorandum of understanding with the Tamil Nadu government in July last year for building a semiconductor high-tech park which includes a fab unit with an investment of $3.5 billion or 25,600 crore over six years.

The government is yet to clear any of the proposals.

The government’s efforts to invite large global players to India come at a time India is attempting to become a significant player in the chip ecosystem on the back of its large, open market and skilled workforce amid geopolitical shifts pushing countries to look at alternative supply chains to China.

“Semiconductor industry will double from the current $600 billion to $1 trillion-plus. India is the most cost-effective country. It is the only place with talent. So the next big destination has to be India. India’s approach of developing a comprehensive ecosystem is absolutely the right thing," Vaishnaw said last week, during his visit to the US, where he visited the Applied Materials semiconductor plant, met with top bosses of HP, Intel, Western Digital, Micron, and AMD, among others, inviting companies to invest and set up manufacturing in India.

India also signed an MoU on a semiconductor supply chain and innovation partnership, which aims to increase private-sector cooperation in the area of semiconductors.

Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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Updated: 17 May 2023, 06:20 AM IST
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