Several states in talks for setting up semiconductor manufacturing plants

Several states, including Gujarat, Madhya Pradesh, Karnataka, Odisha, Telangana, Andhra Pradesh and Tamil Nadu, are in talks with various companies to set up semiconductor manufacturing plants/ fab complexes, Union Minister for Electronics and Information Technology Ashwini Vaishnaw apprised the members of a Parliamentary Consultative Committee attached to his ministry. 

In December 2021, Business Today had exclusively reported that Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh could become India's semiconductor manufacturing hubs. These states are leading manufacturing hubs for automobile, mobile phones and industrial parts, and setting up semiconductor manufacturing facilities adjacent to these would be advantageous. 

"Semiconductor manufacturing, which is crucial to meet the strategic needs of the country, has attracted interest from global companies as good number of applications have been received under the programme," Vaishnaw said while addressing a meeting on 'Semiconductor Policy and Ecosystem'. The meeting was attended by Minister of State for Electronics & Information Technology and Skill Development and Entrepreneurship Rajeev Chandrasekhar, Minister of State for Communications Devusinh Chauhan, along with MPs Preneet Kaur Radha Mohan Singh, K R Suresh Reddy, amongst others.

The government has come up with a Rs 76,000-crore package for semiconductor and display manufacturing, which is likely to reduce the country's dependence on imports in the future, with an aim to become self-reliant in the sector.

The scheme for setting up of semiconductor fabs and display fabs in India will extend fiscal support of up to 50 per cent of project cost on pari-passu basis to applicants who are found eligible and have the technology as well as capacity to execute such highly capital-intensive and resource-incentive projects. 

The Centre will work 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 units in the country.
 
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The initial response to the scheme has been encouraging, with the government receiving five applications for setting up semiconductor and display fabs with total investments to the tune of $20.5 billion (Rs 1,53,750 crore) in the first round of applications till February 15, 2022. While three companies have submitted proposals for semiconductor fabs, two companies have shown interest for setting up display fabs. 

Vedanta, in a joint venture with Foxconn, Singapore headquartered IGSS Ventures Pte and ISMC, has submitted proposal for setting up semiconductor fabs. It has applied for 28nm to 65nm semiconductor fabs with capacity of approximately 1,20,000 wafers per month and the projected investment of $13.6 billion wherein fiscal support from the Centre is being sought for nearly $5.6 billion. 

Vedanta and Elest have also submitted applications for display fabs with a projected investment of $6.7 billion, seeking fiscal support from the government for nearly $2.7 billion. 

Under the scheme for display fab manufacturing in India, applications have been filed for setting up Gen 8.6 TFT LCD display fab as well as 6th Generation display fab for manufacturing state-of-art AMOLED display panels that are used in advanced smartphones. SPEL Semiconductor Ltd, HCL, Syrma Technology and Valenkani Electronics have registered under this scheme for semiconductor packaging, while Ruttonsha International Rectifier Ltd. has registered for compound semiconductors. 

The scheme for establishment of semiconductor and display fabs manufacturing facilities was announced on December 16, with the portal being updated in January this year. The first round of applications were invited till February 15, 2022. Despite aggressive timelines for submission of applications, the scheme has elicited good response. 

The applicant companies have been issued acknowledgment by India Semiconductor Mission (ISM) which has been set up as an independent institution to spearhead 'Semicon India' programme. The government says that the ISM will coordinate with the applicant companies, who have also reached out to states to provide access to the world-class infrastructure needed. It will work closely with the state governments to establish high-tech clusters with 300-500 acres of developed land, 100 KVA Power, 50 MLD water, availability of natural gases and common facility centres for testing and certification. 

Earlier, Vaishnaw told Business Today that the government has already identified institutes where 85,000 engineers will be trained for semiconductor manufacturing. 

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