Synopsis Govt said to be in advanced talks with four global chip makers to set up fabs ETtech (Illustration: Rahul Awasthi) The Centre is likely to invite a “second round” of applications for semiconductor chip manufacturing in the country under the $10 billion incentive package, a person aware of the developments told ET. It is also in “advanced talks” with four global semiconductor companies to set up fabs, with those having expressed interest including the likes of New York-headquartered GlobalFoundries and a major Korean semiconductor firm, the person added. The second round of applications is expected to open as early as mid-March.
Last year, India had accepted five proposals for the scheme with the application window having closed in February 2022. “Apart from applications that the government has at this point, there are four large opportunities, which are in the final stage. So, as and when we open the second window, they will come,” said the person cited above.
Proposals in first round Pointing out that the supply chain for semiconductors is very complex and that it is only now being activated in India, the person added: “This will require a lot of persistence and the government is in listening mode. ” Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories GlobalFoundries did not comment on the matter. ET reported last week that of the applicants in the first round, the Centre is keen to have Foxconn set up a manufacturing plant in India.
It also wants the Taiwanese chipmaker to take the lead in its joint venture with oil-to-metals conglomerate Vedanta. The remaining proposals received in the first round are unlikely to be cleared, multiple people in the know said. “There is a lot of interest in India, but all the large companies like TSMC ,Intel or Samsung have already committed huge investments recently in other geographies.
The government is in active talks with other players who are ready to commit to India. But this is a patient, long-term game,” said a second person in the know. Five applicants are in the running for government incentives under the$10-billion package announced in December 2021 to incentivise semiconductor manufacturing in the country.
This includes three proposals for chip manufacturing, including by the International Semiconductor Consortium ( ISMC ) consortium led by Abu-Dhabi based Next Orbit Ventures . The other two applicants are Singapore-based IGSS Ventures and the Vedanta-Foxconn combine. Rajesh Exports and Vedanta-Foxconn are proposing to set up display fabs.
Proposals by ISMC, IGSS Venture and Rajesh Exports may not get the requisite approvals from the government for the incentives, sources said. ISMC is a joint venture between Next Orbit Ventures and Israel's TowerSemiconductor. The Israeli company was acquired by Intel in February last year and the acquisition is yet to be completed.
“The Tower proposal has the requisite technology, but the Intel-Tower deal isa work in progress, it will take another year. Since the acquisition process is ongoing, the approvals from the government can’t come in at this stage,” said the second person. The central government’s India Semiconductor Mission (ISM), which is the nodal agency overseeing the semiconductor program, as well as the ISMC is “awaiting the outcome of the proposed merger of Tower with Intel announced inFebruary 2022”, Ajay Jalan, the director of ISMC Analog Fab told ET in response to emailed questions on the progress of the project.
Sources said that the government found the remaining two proposals – from IGSS and Rajesh Exports — non-serious while also lacking in solid technology partners. “Most of these applicants have not responded adequately to the questions posed by the government. The government has sought clarity on several aspects such as technology, and funding, among others,” said a third person aware of the matter.
Singapore-based IGSS ventures told ET that they had not received any communication from the government on whether proposals had been approved or turned down. “There has been no official communication on the selection. The last official update we received from ISM and advisors in Q4 (October-December) was that ISMwill open up the selection process and give a window to existing applicants,etc.
, in February-March to make the required changes,” Raj Kumar, chief executive officer of IGSS Ventures, told ET. While the Centre is offering 50% subsidy on fab units, states are offering 10-25% subsidy over and above the central grant, making the total incentive quite “lucrative”. With inputs from Dia Rekhi in Chennai Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp.
click here! Thursday, 09 Feb, 2023 Experience Your Economic Times Newspaper, The Digital Way! Read Complete Print Edition » Front Page Pure Politics Brands & Companies ET Markets More RBI Increases Repo Rate by 25 bps to 6. 5%, Signals a Pause The Reserve Bank of India (RBI) Wednesday raised policy interest rates by a quarter percentage point, the sixth climb in a row for a key gauge, and signalled the latest increase gives it elbow room to pause before taking a broader directional call on the cost of funds amid widening differences within the rate-setting committee. All-Star Lineup of Speakers at ET GBS 2023 PM Modi to deliver keynote address on opening day of the ET GBS 2023 at The Taj Palace Hotel, New Delhi on February 17-18.
Read More News on semiconductor units india next orbit ventures ismc tsmc semiconductor chip manufacturing rajesh exports vedanta orbit Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox. .
. . more less ETPrime stories of the day Real Estate Interest rates are rising, so are rental yields.
Is it the right time to invest in property? 8 mins read 3 insights to kick-start your day, featuring Swiggy’s “poor judgement” 3 mins read Strategy Stock Radar: Technical charts suggest HDFC Bank is likely to hit fresh record highs in next 3-6 months; time to buy? 3 mins read Subscribe to ETPrime.
