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