India’s 1st Ever Chip Manufacturing Factory Will Launch In This State: Rs 24,000 Crore Investment Expected

India’s first-ever state to have a semiconductor fab will be Karnataka, as confirmed by the International Semiconductor Consortium (ISMC).

India's 1st Ever Chip Manufacturing Factory Will Launch In This State: Rs 24,000 Crore Investment Expected

The ISMC has proposed a $3 billion fab, which may start construction as early as February 2023. 

India’s First Semiconductor Fab To Begin Construction By Feb 2023

The construction of the fab will reportedly begin by February 2023, as per reports. 

The ISMC will produce 40-65 nanometer analog chips for “the defence and auto sectors” as well as other industries.

As per CN Ashwath Narayan, Karnataka Minister for Information Technology, Electronics, and Skills Development, “We will probably become the first state in India to have a semiconductor fab. ISMC has the technology and the capability. Subject to the central government’s approval, we hope to see work starting on this plant from February.”

Under its Rs 76,000 crore Production-linked Incentive (PLI) scheme, the Central Government had promised to subsidize semiconductor makers up to 50% of the project costs in 2021. Additionally, the most recent round of US limitations on the export of machinery for the production of semiconductors to China has prompted businesses to relocate to India.

As we already know, India is already skilled at developing semiconductors, but a scarcity of fabs forces it to rely on imports.

One of the three consortia chosen by the Centre for incentives is ISMC. for those unaware, a joint venture between Next Orbit Ventures of the UAE and Tower Semiconductor of Israel. Intel Inc. purchased Tower Semiconductor in February.

Earlier this year, Foxconn and Vedanta revealed plans to build a semiconductor factory in Ahmedabad. Tamil Nadu will also get a $3.2 billion semiconductor park from Singapore’s IGSS Ventures.

Government incentives will be given to every project. Once construction begins, it would take roughly 4-5 years for the ISMC plant to become operational.

Indian Government’s incentive scheme

On 15th December 2021, the government of India had announced a new incentive scheme worth Rs.76,000 crore (approximately $10.2 billion) in a push to boost the semiconductor ecosystem in India.

The group is reportedly planning to set up an Analog Fabrication in technology partnership with Israel-based Tower semiconductors (this company is now in the process of being acquired by Intel Foundry Services).

In July 2021, Ajay Jalan, the founder and managing director of Next Orbit Ventures, spoke on lenght on the subject of his ambition to establish a semiconductor fabrication factory in India.

ISMC proposes to establish a fabrication at the cost of a $3 billion project and if it’s proposal is selected, it is eligible for an incentive from the center for up to $0.9 billion.

  1. […] Karnataka may become India’s first state to have a semiconductor fab. The International Semiconductor Consortium’s (ISMC) proposed USD3B fab may start construction as early as Feb 2023. The ISMC will make 40-65nm analog chips which will cater to “defence and auto sectors” and to some other sectors. The Centre had announced subsidies of up to 50 per cent of the project costs for semiconductor manufacturers under its INR76,000 crore Production-linked Incentive (PLI) scheme in 2021. Moreover, the latest set of restrictions imposed by the US on sales of semiconductor-making equipment to China has encouraged companies to shift to India. ISMC, which is a joint venture between UAE’s Next Orbit Ventures and Israel’s Tower Semiconductor, will be among the three consortia shortlisted by the Centre for incentives. Tower Semiconductor was acquired by Intel in Feb 2022. (Live Mint, TechNews, Laoyaoba, […]

  2. […] with a newfound interest in technology, attempting to build a bridge between the two! Prev Post India’s 1st Ever Chip Manufacturing Factory Will Launch In This State: Rs 24,000 Crore Investm…Next Post Highly Processed Food Like Frozen Pizza, Ready-To-Eat Snacks Can Kill You: Health Research […]

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