Govt likely to approve new semiconductor fab manufacturing applications
The government may approve fresh applications for the semiconductor fab manufacturing and its related components, including that of Vedanta in the coming days.
Sources close to the development told Businessline that the government had halted the processes due to elections, but things will get started again. Sources also added that some new projects would also be announced in the upcoming Semicon India, between September 11 and 13, which will be inaugurated by Prime Minister Narendra Modi.
“We constantly keep reviewing the progress of construction with Micron (the first company to be setting up a semiconductor plant in India). So with others also, we have to finalize the fiscal support agreements…once that is done, they will start construction at various sites that have been approved for them,” a senior government official told Businessline.
The government had also announced a semiconductor fab for Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), coming up at Dholera Special Investment Region, Gujarat, with an investment of ₹91,000 crore. Recently, Tata Electronics also announced the setting up of a chip assembly plant in Assam with an investment of ₹27,000 crore.
These projects are driven under the government’s ‘India Semiconductor Mission’ and notified under the ‘Modified Schemes for Setting up of Semiconductor Fabs and Display Fabs in India’, in which the government will extend fiscal support of 50 percent of project cost on the pari-passu basis to eligible applicants with the capacity to execute such high capital- and resource-intensive projects.
The Centre is also working closely with the State governments to establish high-tech clusters with requisite infrastructure in terms of land, semiconductor-grade water, high-quality power, logistics, and research ecosystem to approve applications for setting up at least two greenfield semiconductor fabs and two display fabs in the country.
Other applicants
Apart from Tata Electronics and Micron, other conglomerates like Murugappa Group’s CG Power and Industrial Solutions (CG Power) have formed a joint venture with Renesas Electronics America (Renesas) and Stars Microelectronics (Thailand) Public (Stars) to establish an outsourced semiconductor assembly and testing (OSAT) facility in Gujarat.
Israel’s Tower Semiconductor had also shown its interest in setting up a chip facility in India with an investment of around $8 billion, but the government has asked the company to rework its proposal, and onboard a technology partner that has a better technology and can offer advanced nodes for manufacturing in India.
The government had also put on hold Vedanta Group’s proposal for setting up a mega semiconductor fab plant due to its inability to rope in a technology partner. The Group’s JV with Taiwan’s Foxconn fell through last year, and it had to apply again.
When asked about the progress on such reapplications, a senior official at the Ministry of Electronics and IT said, “At this point, we are examining. They have reapplied and we are re-examining…all the applications are there and the window is still open for all (firms); whosoever applies, we will look into them.”
On the same query, IT Minister Ashwini Vaishnaw also said, “It is a continuous process and the window is open for the next 10 years…it’s a long project.
