India is poised to announce a 40 nanometre (nm) semiconductor fabrication unit, along with the acceptance of multiple compound fab proposals under the modified semiconductor investment scheme. Rajeev Chandrasekhar, the Minister of State for Electronics and IT, revealed this development in a recent interview, reports Live Mint.
The forthcoming 40nm silicon fab announcement is expected to be followed by a series of proposals for compound fabs. Chandrasekhar emphasized that these decisions are part of a long-term vision and not influenced by election cycles. The chips produced by the fab are projected to be available within two to three years of the announcement.
The minister did not disclose the names of the companies that have submitted the proposals for the compound fabs.
The government recently revised its $10 billion financial incentive scheme to promote the establishment of semiconductor, packaging, testing, and allied fabrication units in India. The updated scheme now allows proposals for mature nodes, including those above 40nm, without a specific deadline.
Vedanta Foxonn Pvt. Ltd. has also applied under the modified scheme. Although the companies have decided to apply separately following their split, the proposal is likely to stay with Vedanta or be replaced by a fresh application from Vedanta. The legal entity that applied for the scheme remains unchanged, and any equity changes are irrelevant to the proposal.
Foxconn, in addition to its joint application, has indicated its intent to independently submit a proposal. The Taiwanese contract manufacturer is reportedly in discussions with Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) and other semiconductor fabricators.
Alongside the semiconductor fabrication initiatives, the government plans to launch the India Semiconductor Research Centre (ISRC) through a public-private partnership model. This endeavor will involve the modernization of the Semiconductor Laboratory in Mohali, Punjab, where a research-cum-commercial fab will be established. The government is looking to invest approximately Rs. 10,000 crore in the fab project and is exploring the possibility of setting up a branch of the research center in South India.
The Ministry of Electronics and Information Technology (MeitY) will collaborate with Invest India to attract investments in the semiconductor space from entities based in Japan, Taiwan, South Korea, Europe, and the US. The appointment of Nivruti Rai, former head of Intel India, as the managing director and chief executive officer of Invest India is aimed at bolstering India’s appeal as an attractive investment destination for semiconductor companies.
MeitY is also organizing the Semicon India 2023 event to showcase recent investments in the semiconductor industry, including those made by Micron Technology Inc., a US-based company.
Following Micron’s announcement of $825 million investments in its $2.75 billion packaging plant, several proposals for testing and packaging units for compound and silicon semiconductor chips have been submitted to the government.
The government’s approach is focused on encouraging investments in India’s semiconductor ecosystem, offering economic incentives to potential investors, and positioning India as a safe and trusted destination for semiconductor manufacturing.
With the aim of attracting more investments, the government is providing an attractive market regime, favorable laws, local regulations, and capital subsidies, recognizing the concentration of semiconductor technology within a few companies and geographies.
The proposals and initiatives unveiled by the Indian government signify a strategic step towards establishing a robust semiconductor industry in the country and fostering technological growth on a long-term basis.
