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India calls for fresh bids for wafer fab subsidies

India calls for fresh bids for wafer fab subsidies

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By Peter Clarke



India has re-opened the application window for its US$10 billion support fund intended to provide subsidies for wafer fab building and pushed back the three entities that have applied so far.

India’s government announced the Semicon India Programme with an outlay of 76,000 crore rupees (about US$9 billion) in December 2021. The scheme was intended to encourage the manufacturing of semiconductors at around 28nm and displays in India.

The Ministry of Economics and IT has now opened up an application window from June 1, 2023 and said that it welcomes new submissions while those that have already applied should submit suitably modified proposals. The India Semiconductor Mission will evaluate the investment proposals.

Proposals have been received from a venture between Vedanta and Foxconn; from a consortium around New Orbit Ventures and Tower Semiconductor and from IGSS Ventures. However, concerns have been raised that some of these ventures do not have the experience, expertise and intellectual property to succeed. While foundry Tower is credible it is currently in limbo as it is waiting to be acquired by Intel Corp.; a process that is not being expedited by the Chinese regulator (see Intel acknowledges Tower takeover delay).

India is offering incentives of up to 50 percent of the project cost to companies/consortia/joint ventures for the setting up of wafer fabs in India of any node, including mature nodes. Previously the scheme favoured 28nm nodes and smaller geometries. The same subsidy incentive is available for setting up of display fabrication units in India.

India also has an incentive scheme for setting up a wafer fab for compound semiconductors and chip packaging facilities and another for fabless chip companies to receive support for designing chips. The application periods for these schemes extend to December 2024, MEIT said. Under the Design Linked Incentive (DLI) scheme 26 applications have been received so far and five approved.

India had hoped for more prominent chip companies to lead consortia that would bring semiconductor manufacturing to the sub-continent (see India lobbies Intel, Globalfoundries, TSMC for fabs).

One factor that has prevented India developing a domestic chip industry is a lack of reliable electricity and water supply. This increases costs for chipmakers who have to ensure such systems themselves. Another concern has been the availability in India of the specialist ultrapure materials and gases required for chipmaking.

Ashwini Vaishnaw, the railways and telecom minister, has been quoted saying that the modified Semicon India Program will focus on creating a supportive ecosystem for semiconductor manufacturing in the country first, and not only on fabrication units.

Related links and articles:

MEIT announcement of modified schemes

News articles:

Intel acknowledges Tower takeover delay

Report: Next Orbit to sell stake in Indian wafer fab

Micron’s $1bn Indian chip packaging plant close to approval

India lobbies Intel, Globalfoundries, TSMC for fabs

Tata hires former boss of Intel foundry services

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