Ground Breaking For Commercial Silicon #FabInIndia: Is The Target Mid-2022 Or Early-2023?

As a prelude for those who have not followed this domain closely and as a reminder for those who have, India announced its incentive schemes to create a semiconductor ecosystem with an initial overlay of Rs 76,000 crore on 15 December 2021.

Two of the schemes — that for Silicon CMOS fabs and display fabs — had a deadline of 15 February 2022 for applications, while others like compound semiconductors or sensor fabs, outsourced semiconductor assembly and testing (OSAT) and design have three year time to apply.

When there were speculations of 15 February deadline being extended. I had opined both in Swarajyamag in an article as well as in Economic Times in a quote that the government should close the deadline on 15 February itself, assess and decide on applications received by then, prove our capability and later when it appears that any of the "semiconductor giants" as the government wants to see apply for the Silicon fab are ready, reopen the scheme.

On 19 February, despite it being a Saturday, government released the names of all applications it had received thus far including the ones for which the application process was still open and by the very next day, Swarajyamag had published detailed information to the extent known about all the applicants.

On 23 February, Swarajyamag interviewed Minister Ashwini Vaishnaw exclusively on the topic of "India's Vision For Building Semiconductor Ecosystem". In that interview as well as in the reports published the next day, the minister was quoted as saying. "The government will undertake a detailed evaluation of applications it has received in response to the mega semiconductor scheme and expects to complete the entire process and sign agreements with companies in the next 8-10 months"

A News18 report quoted the minister as saying, "the applications that we have received so far, we must execute them well and that will create the confidence about India’s capabilities...... for many more applicants to come", and when asked whether the work on the ground can be started at some point in early 2023, he had said, “it is a bit aggressive target but yes I think we as a nation need to work at that speed.”

Meanwhile, earlier in the year, the government had opened positions of CEO, CTO, CFO and others for "India Semiconductor Mission" (ISM) — the nodal agency that was meant to review the applications and send its yes/no decisions as well as recommendations.

According to details shared by a Ministry of Electronics and Information Technology MeitY official, the ministry is looking for a person with over 25 years of experience in the semiconductor industry and more than 10 years of experience at global level to serve as chief executive officer (CEO) of ISM. The applicant for CEO position should have served in a leadership position earlier at least at the position of vice-president. The CEO will head the mission. The business division of ISM will be run by a professional management including an additional chief executive officer, chief technology officer (CTO), chief strategy officer (CSO), chief financial officer (CFO), chief business development officer (CBDO), etc. These all shall be assisted by domain experts from the industry.

In his 23 February interview to Swarajyamag, Minister Ashwini Vaishnaw had hinted that "there will be some news in the upcoming weeks" about ISM, however even after six weeks thence, there was no public information available about how many industry veterans or domain experts have filled up any of the key ISM full time positions.

What we heard instead on 6 April was that the government formed an advisory committee to “steer the objectives (of ISM) in a structured, efficient, and strategic manner, and provide necessary guidance to the ISM executives”. The committee “comprises of senior government officials, established academicians as well as industry and domain experts”. It is not clear yet what kind of role the advisory committee may have in making yes/no decisions on the applications.

On 8 April, Financial Express in a report quoted anonymous "official sources" as saying "the process to evaluate the five applications (3 for Silicon fabs and 2 for display fabs) which the government received till the cut-off date of mid-February is currently on and would be over in a month’s time".

The report went on to quote "one of the sources" that "Some of them may receive approval, some may face rejection. So, if more people want to come, there will be space. The window to receive fresh applications will be announced at an appropriate time."

I like quick action in general, however when at least two speculations from 2021 — this and this — related to #FabInIndia.quoting "anonymous sources" turned out to be incorrect or partial or yet to materialize, one wonders what to believe and what not to.

Interestingly, the same reporter in the same medium had in October 2021 quoted ‘sources' as saying "The government is aiming to lay the foundation of the country’s first semiconductor manufacturing unit by June-July next year", perhaps making the timeline of that speculation consistent though non-verified.

As for whether more "big players" are ready to apply now, in the absence of any solid evidence, I would like to be on the pessimistic side. The likes of TSMC, Samsung, Intel, UMC and GlobalFoundries are likely to be busy with their expansion plans elsewhere. Despite possibly offering the best incentive scheme for 28nm and below fab as there is the possibility of 50 per cent from central government, more from the State chosen and no upper limit, India is not yet a 'proven ground' for them to jump in.

The one #FabInIndia application which Intel is indirectly part of — that of ISMC — where Next Orbit Venture group has been ready with a definitive agreement with Tower Semiconductors of Israel (Intel is expected to complete the acquisition process of Tower Semiconductors by end of 2022 or early 2023), due market studies, infrastructure assessment of a location and an incentive offer from Gujarat government there is now additional news of their collaboration with defence PSUs.

A news report in The New Indian Express about Israel prime minister's visit to India hinted that had the visit happened in April as originally scheduled "One of the most significant announcements would have been on the setting up of a manufacturing facility of semi-conductors". As per the report, the rescheduled visit is likely to happen in or after June.

For a moment if I wear the most optimistic hat that I can think of, ISMC proposal getting approved in May and Israel and Indian prime ministers jointly doing a ground breaking in June-July will be the end of a long wait.