Relief for Vedanta-Foxconn JV? MoS IT says Centre set to approve semiconductor fab proposals shortly

Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar has said the Centre has reopened the window for fresh fab applications for leading and mature nodes. The window to re-apply for government incentives under the modified semiconductor scheme opened on June 1. This could be a fresh lifeline for applicants, such as the Vedanta-Foxconn JV. 

Business Today has earlier reported that existing applications, including Anil Agarwal’s Vedanta-Foxconn joint venture, may also have to apply afresh. 

On Wednesday, Chandrasekhar tweeted that India will start accepting and considering new applications for fabrication plants from new and existing applicants under the India Semiconductor Mission. 

Talking about reopening the window, Chandrasekhar said that it is being done because the earlier window was open only for 45 days, now there is renewed interest. 

“Yday @GoI_MeitY reopened the window for fresh fab applications for leading n mature nodes. This is being done since the Jan 2022 window was closed bfr policy was improved to encourage mature nodes wth equal incentives… In the coming weeks, we expect to approve multiple semicon packaging and fab proposals,” Chandrasekhar tweeted. 

The first window for more expensive 28-nanometer fabrication plants was kept open for 45 days only in January 2022 and received three applications that were evaluated by India Semiconductor Mission and its Advisory group. 

The minister on Wednesday said that current and new players may apply afresh in various nodes that they have the technology for. The strategy now is to encourage the making of mature nodes of over 40 nanometer. 

“We are now reopening the window for semiconductors, open indefinitely. We are allowing existing applicants to re-apply for more mature nodes. We are opening up a fresh window for applications, he said. 

Modified semiconductor scheme 

The "Modified Semicon India Programme" raised the financial incentive of "50 per cent of the project cost for companies, consortia, joint ventures for setting up semiconductor fabs in India of any node (wafer size)”, a report by news agency PTI said. 

The full name of the scheme is "Modified Scheme for setting up of Compound Semiconductors, Silicon Photonics, Sensors Fab, Discrete Semiconductors Fab and Semiconductor ATMP, OSAT facilities in India". According to a statement cited by PTI, the application window for the modified scheme will be open till December 2024. 

Besides, a fiscal incentive of "50 per cent of the project cost is available for setting up of display fabs of specified technologies in India". 

Centre's plan

In December 2021, the government had announced an incentive scheme of Rs 76,000 crore to set up a semiconductor manufacturing and fabrication ecosystem in India. 

The Centre said it will be attracting more big-ticket investments under the plan for chip and display production, in a bid to India a leading player in the global supply chain.  

The government had said that it will provide financial support for new semiconductor facilities to cover 50 per cent of project costs and shall remove a ceiling for maximum permitted investment for display manufacturing. 

Last year in September, Vedanta and Foxconn JV announced that they would invest $19.5 billion to set up semiconductor and display production plants in Gujarat, generating more than 1,00,000 jobs. 

The IT ministry had received applications from a Vedanta-Foxconn joint venture, Next Orbit Ventures, which has partnered with Israel’s Tower Semiconductor as well as Singapore-based IGSS Ventures. 

A May 31 report by Bloomberg had said the Vedanta JV won't get government incentives to make 28nm chips as it had not fulfilled the projects's specifications. 

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