Here Is What We Know So Far About The Applicants For India's $10 Billion Incentive Scheme For Semiconductors

by Swarajya Staff - Feb 20, 2022 11:46 AM +05:30 IST
Here Is What We Know So Far About The Applicants For India's $10 Billion Incentive Scheme For Semiconductors
Semiconductors.
Snapshot
  • Here Is What We Know So Far About The Applicants For India's $10 billion Incentive Scheme For Semiconductors

On 15th Dec 2021, the government of India had announced a new incentive scheme worth Rs.76,000 crore INR (nearly $10.2 billion) in a bid to boost the semiconductor ecosystem in the country.

The policy broadly aimed at supporting 4 "buckets" of initiatives summarised as below.

Rs 76,000 crore Semiconductor Mission
Rs 76,000 crore Semiconductor Mission

The Union Government on Saturday (Feb 19) announced the details of the companies and consortiums that have applied in each of these incentive 'buckets', and in some cases the quantum of total investment planned and the total incentives sought from the government.

Here is what we know about the firms and consortium that have applied for semiconductor incentive scheme.

1. Category-A: Silicon (CMOS) fabs

Vedanta Foxconn JV, IGSS Ventures, and ISMC have proposed to set up electronic chip manufacturing plants with investments totaling $13.6 billion and have sought the support of $5.6 billion from the Centre under the Rs 76,000 crore Semicon India Programme.

The applications have been received for setting up 28 nm to 65nm Semiconductor Fabs with a capacity of approx. 120,000 wafers per month.

A) ISMC is the proposal by Abu Dhabi-based Next Orbit Ventures, representing a consortium of investors, for establishing a semiconductor fab factory in India

The consortium is likely to have submitted an application for the Analog Fab in technology partnership with Israel-based Tower semiconductors (which is now in the process of being acquired by Intel Foundry Services).

In an exclusive interview with Swarajya in July 2021, Ajay Jalan, the founder and managing director of Next Orbit Ventures, spoke extensively on his ambition to establish a semiconductor fab factory in India.

ISMC proposes to establish a fab at the cost of a $3 billion project and if selected, it is eligible for an incentive from center up to $0.9 billion. The likely location is Dholera SIR in Gujarat.

ISMC Proposal
ISMC Proposal

B) Vedanta in JV with Foxconn has reportedly submitted a $7.4 billion proposal for setting up a 28nm fab. The company is venturing in to in a chip manufacturing unit in partnership with Hon Hai Technology Group (Foxconn),

If the project proposal is approved, Vedanta-Foxconn JV will qualify for up to $3.7 billion from the Union Government

The company said that it expects the fab unit to become operational by 2024. It is in process of looking at a suitable location for the fab.

"Foxconn, though with no prior manufacturing experience in semiconductors, was the perfect partner for the project given its global footprint in electronics manufacturing" ET quoted, Akarsh Hebbar, global managing director of Vedanta Group’s display and semiconductor business, as saying.

Foxconn is likely to invest around $118 -$120 million as part of a joint venture.

C) IGSS Ventures Pte Ltd (IGSSV). IGSS Ventures is a technology investment holding company that focuses on "building companies with competitive advantages in ground-breaking technologies". Very few details are available on the proposal or technology partnership it has forged.

If one were to do a back-of-the-envelope calculation based on the incentives offered by the government, the IGSS proposal maybe for $3.2 billion with an incentive sought likely to be tune of close to $1 billion. The investment size means that IGSS is likely to have proposed setting up a 65nm (or close) fab.

2. Category-B: Display fabs

Two companies, Vedanta and Elest, have proposed to set up a display manufacturing unit with a projected investment of USD 6.7 billion and have sought the support of USD 2.7 billion from the Centre under the Scheme for setting up of Display Fabs in India.

Setting up display fabs has been identified as a priority area by the government. Display units account for up to 25% of the Bill of Materials (BoM) for smartphones and 50% for TVs. Despite huge growth in overall electronic exports, significant value addition potential is lost due to the lack of display fab capabilities within the country

Elest Private Limited lists Rajesh Mehta and Prashant Mehta as directors. The duo founded Rajesh Exports, an Indian multinational gold retailer headquartered in Bangalore, Karnataka. The group refines, designs, and sells gold and jewelry. It is one of India's biggest exporters with plants that have a processing capacity of 250 tonnes of jewelry and gold products per annum.

Detailed information is not available on the technology partnership for Vedanta's display fab foray. The company has said that it plans to $10 billion on displays.

Though the policy gives up to 50% incentive for approved display fabs, there is a ceiling of INR 24000 crore (approx $1.6 billion) per project. It is likely that one of the applicants may have proposed a $4.5 billion display fab project for a $1.6 billion incentive, while the other applicant would have proposed to set up a $2.2 billion project for a $1.1 billion incentive.

The government's press release noted that the first round of applications was invited till 15.02.222 which hints at the possibility of inviting applicants in the future also.

For the next two categories - Compound semiconductors-OSAT and design companies, the government while unveiling the policy had announced the application deadline as 1 Jan 2025. However it information on applications received so far. These categories continue to be open for applications and we are likely to see more names in future.

3. Category-C: Compound semiconductors and OSAT

Four companies - SPEL Semiconductor Ltd., HCL, Syrma Technology, and Valenkani Electronics, have applied for incentives under the scheme for semiconductor Packaging. Ruttonsha International Rectifier Ltd. has registered under this Scheme for Compound Semiconductors.

The only name that has come out so far for compound semiconductors - Ruttonsha - had been in the news being in association with Visicon power

The company founder Harshad Mehta has said that the process of setting up a semiconductor fab in Baroda. "Our plan right now is to transfer the technology from our Oregon fab to the one in Baroda" he noted.

SPEL Semiconductor: The company website claims "Being India’s first & only Semiconductor IC Assembly & Test facility, SPEL pioneered the Indian OSAT market". It is not known yet if the proposal is to expand their existing facility in Chennai or a fresh new factory

HCL technologies has been in semiconductor related fields. It acquired Sankalp semiconductors and has partnership for other ventures and does mention "OSAT partners" as part of its VLSI design services. The company is headquartered in Noida, but it is not so far disclosed where it plans to set up OSAT units if approved

Syrma technologies is an Electronics Manufacturing Services (EMS) company It has 5 production facilities, including at Chennai, Bawal in the North, and Bargur near Bengaluru for electronics manufacturing. The company has two manufacturing facilities located in Chennai

Velankani Electronics is a Bengaluru- based electronics manufacturing enterprise focussed on set top boxes, RF meters, LNBs, and headends for the broadcast industry;

4. Category-D: Design-Linked Incentives

Three companies, Terminus Circuits, Trispace Technologies and Curie Microelectronics, have submitted applications under design-linked incentive scheme.

India is one of the favourable destinations for semiconductor design with more than 50,000 design professionals and many design services companies. Over 2000 ICs and chips have been designed in India in the last few years.

5. SCL Mohali

As per the said Cabinet approval, SCL Mohali has also been handed over to MeitY from Department of Space and it is being opened up as a commercial fab for wider participation by Indian semiconductor design companies.

Swarajya had reported earlier about some of the plans related to SCL here and here

Get Swarajya in your inbox everyday. Subscribe here.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Comments ↓
Get Swarajya in your inbox everyday. Subscribe here.
Advertisement

Latest Articles

    Artboard 4Created with Sketch.