Select Page

According to ET, the Centre will likely invite another round of applications for semiconductor chip manufacturing in the country as part of the $10 billion incentive package. The Centre is also in advanced talks with four global semiconductor companies to establish fabs. According to the person, these include the New York-based GlobalFoundries and a significant Korean semiconductor company.

The second round of applications will open in mid-March. India accepted five applications last year for the scheme, with the application window closing in February 2022.

“Aside from the government’s current applications, four opportunities are in their final stages. According to the person mentioned above, “They will be there as soon as we open the second window.”

In the first round, proposals

The person pointed out that the supply chain of semiconductors is complex and is being activated only in India. He added, “This will take a lot more persistence and the government are in listening mode.”

ET reported last week that the Centre is interested in Foxconn setting up a manufacturing facility in India. It wants the Taiwanese chipmaker and the oil-to-metals conglomerate Vedanta to lead its joint venture.

Multiple people aware of the situation said that the proposals received in round one would not be approved.

There is a lot of interest in India, but large companies such as TSMC and Intel have recently made significant investments in other countries. India is an active market for other players. However, this is a long-term game that requires patience,” another person in the loop said.

Five applicants are currently in the running to receive government incentives under the $10-billion package announced in December 2021 to encourage the nation’s semiconductor production. The International Semiconductor Consortium ( ISMC) has submitted three proposals for chip manufacturing led by Abu-Dhabi-based Next Orbit Ventures. Two other applicants are the Singapore-based IGSS ventures and Vedanta–Foxconn. Rajesh Exports and Vedanta Foxconn propose to establish display fabs.

Sources said that Rajesh Exports, IGSS Venture, and ISMC might need to be approved by the government for the incentives.

ISMC is a joint venture of Next Orbit Ventures with Israel’s TowerSemiconductor. The acquisition of the Israeli company by Intel was completed in February 2013.

“The Tower proposal contains the necessary technology. However, the Intel-Tower deal, which is still in process, will take an additional year. The approvals of the government cannot be given at this stage because the acquisition process continues,” stated the second person.

Ajay Jalan (director of ISMC Analog Fab), the central government’s India Semiconductor Mission, which is the nodal agent overseeing the semiconductor program, told ET that they are “awaiting the outcome” of the proposed merger between Tower and Intel, in response to emailed queries about the progress of this project.

Sources claimed that the government considered the two remaining proposals – Rajesh Exports and IGSS – non-serious while lacking solid technology partners.

“Most applicants have yet to reply adequately to the government’s questions. A third person familiar with the matter said that the government sought clarification on many aspects, including technology and funding.