Indian subsidies fail to attract top chipmakers

Indian subsidies fail to attract top chipmakers

Business news |
By Peter Clarke

India has said that it has received investment proposals from five companies to build wafer fabs and display productions facilities under a government incentive scheme.

However, the details have revealed that no top chipmakers have yet come forward.

The Semicon India Programme scheme was announced in December 2021 (see India details wafer fab subsidy scheme favoring 28nm) and already it is known that metals and mining conglomerate Vedanta Group had applied to join (see India’s Vedanta budgets $15 billion for electronics entry).

The government has now said it has received long-term proposals for chip and display manufacturing plants worth $20.5 billion from five companies.

Three proposals are for wafer fabs: as previously announced Vedanta in joint venture with Foxconn, IGSS Ventures of Singapore and ISMC. The applications were for setting up wafer fabs operating at between 28nm to 65nm process nodes with a capacity of around 120,000 wafers per month.

The projected chip investment is $13.6 billion of which the Indian government is being asked to supply around $5.6 billion.

Two more fab builders

IGSS Ventures is a Singapore-based holding company seeking to develop emerging semiconductor technologies. The company operates a 200mm wafer fab foundry in Singapore called CompoundTek providing silicon photonics circuits and test services. It also has aspirations in gallium-nitride semiconductors.

ISMC is reportedly funded by Next Orbit Ventures, a Mumbai venture capital company that already had a proposal to build a wafer fab in India that had stalled (see Indian analog wafer fab plan stuck in neutral).

On the displays front Vedanta and Elest have submitted applications to build a liquid crystal display factory and one for active matrix organic light emitting diode (AMOLED) displays. These two factories have a projected budget of $6.7 billion and are looking for $2.7 billion in government support.

Four companies – SPEL Semiconductor, HCL Technologies, Syrma Technology and Valenkani Electronics – have submitted applications to build semiconductor assembly, testing, marking and packaging units.


One reason India has previously failed to attract investments in high-tech manufacturing has been a lack of reliable infrastructure.

The India Semiconductor Mission (ISM) is an independent institution set up to spearhead the Semicon India programme. It will coordinate with the companies to help them access infrastructure in the country’s states. It will work with state governments to establish technology clusters with 300 to 500 acres of land. These will have services of 100KvA power, 50 million litres of water per day, and common facility centres for testing and certification.

However, the lack of top chip manufacturers in the current list of investors and the fact the investment is predominantly domestic is likely to be a source of concern. There will questions about whether these applicants can deliver what India will be paying them to deliver.

Related links and articles:

India details wafer fab subsidy scheme favoring 28nm

India’s Vedanta budgets $15 billion for electronics entry

VC wants to reboot Indian wafer fab plans

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