India set to announce its first semiconductor fab

India will announce its first semiconductor manufacturing facility in the coming weeks as the country moves towards becoming more self-sufficient for its chip supply in the wake of pandemic supply chain disruptions and ongoing US semiconductor restrictions on China.

The country is well positioned to boost a vibrant chip industry over the next three to four years, thanks to “a supportive policy” and the government’s push to boost its “manufacturing ecosystem,” Indian IT Minister Ashwini Vaishnav said on Tuesday. according to A MOT (Press Trust of India) report.

Three entities — including a Vedanta-Foxconn joint venture, the International Semiconductor Consortium (ISMC) and Singapore’s IGSS Ventures — are vying for funding under India’s $10 billion stimulus program, awaiting official approval to set up semiconductor manufacturing units. Vaishnav said approval and funding decisions will be announced in the coming weeks, according to PTI.

India is trying to reduce its dependence on chip imports

By promoting local production, India can reduce its dependence on imports and become more resilient to global supply chain disruptions. This can also create employment and promote economic growth.

The pandemic caused disruptions in chip supply, leading to a global shortage of semiconductors and a rise in prices. Meanwhile, the US has imposed restrictions on the export of chips and chip-making equipment to China — including semiconductors used for servers, AI and high-performance workloads — and has pressured its allies to implement similar controls. The restrictions restrict China’s ability to manufacture and export semiconductors and a range of products incorporating them.

If the Vedanta-Foxconn joint venture will set up its semiconductor and display manufacturing facility in Dholera Special Investment Region near Ahmedabad, Gujrat.

ISMC, a consortium comprising Abu Dhabi-based Next Orbit Entures and Israel’s Tower Semiconductor (now owned by Intel), has signed a memorandum of understanding with the government of Karnataka for a $3 billion manufacturing plant in Karnataka, where it has sought 150 acres in the industrial area of ​​Kochanahalli.

IGSS has chosen Tamil Nadu as its factory location.

As the three consortia compete for the incentives, only one company is likely to receive funding, and that will likely be Vedanta-Foxconn, according to a report from the India-based business news site. Mint. Meanwhile, IGSS is nearly out of competition, according to the report, citing a top official familiar with the matter.

Incentives expanded to global chip manufacturers

India offers a range of financial and other incentives, including infrastructure development and lean regulation, to attract international companies to establish semiconductor manufacturing facilities in the country amid competition from China, Taiwan and South Korea.

India will provide financial assistance equivalent to 50% of the cost of a great construction project “to applicants who qualify and have both the technology and capacity to undertake such highly capital and resource intensive projects,” according to a statement. statement from the Ministry of Electronics and Information Technology. in september.

“Government of India will work closely with state governments to establish high-tech clusters with required infrastructure in semiconductor grade land, water, high-performance power, logistics and research ecosystem to approve applications to establish at least two greenfield Semiconductor Fabs and two Display Fabs in the country,” the statement said.

To drive a long-term strategy for developing a sustainable semiconductor and display ecosystem, a specialized and independent agency, the India Semiconductor Mission, was established last year. The charter is to work with other government agencies to ensure efficient implementation of the country’s semiconductor initiatives.