15 February was the original deadline mentioned by the government of India-driven "India Semiconductor Mission" (ISM) for applications to set up silicon CMOS chip (IC) fabs in India and avail 30-50 per cent upfront incentives offer from the Centre depending on what process node fab it is.
It is more than a day after the deadline and till the time of writing this article, there is no news from ISM on how many applications it received and whether there is any plan to extend the deadline or reopen the scheme in another window. The notification of the policy had clear guidelines on the operational experience of the applicant or the partner.
There are only a limited number of foundries (fabs) which have experience or a production grade licence to share for 65nm or 45nm or 28nm and below. Whether any of those foundries have agreed to either set up a fully-owned fab in India or get into a JV (joint venture) with an Indian group or agreed for a technology transfer (licence) is the big question.
While news in various media for the past two or three months may have given an impression that some big groups are getting into semiconductor manufacturing in India, there is no official communication in any of them pointing to the possibility of a silicon CMOS fab in the process nodes that government of India has sought for.
While pleasant surprises are always welcome, in the absence of any confirmed information pointing to that, the closest possibility is an application from Next Orbit Ventures (NOV), whose founder was interviewed in Swarajya in July 2021. Here are key points from that interview.
1) NOV has a Definitive Agreement with one of the top 10 foundries for analog fab and a Letter of Intent with one of the top 5 foundries for digital fab. (Note: Also mentioned as among top three, see next point).
2) The tech partner for digital (logic) fab "among the top three in the world, has assured us that once we create semi infra and a supply chain through analog fab, they will come for 28 nm digital or lower node as per Indian market requirement at that point of time."
The names of these technology partners were not revealed in the interview, however, in later news like this and this the technology partner for 65nm Analog fab has been mentioned as Israel's Tower semiconductor. Indications are that Next Orbit Ventures have gone ahead and submitted its application for the same, with Dholera in Gujarat as a possible location. Feasibility assessment of the site has already been done and Gujarat government has also promised fiscal and other support in addition to the Centre.
Coincidentally, on the same day as India's original deadline for applications for Silicon fabs, Intel Foundry Services (IFS) announced acquisition of Tower Semiconductor — a detailed analysis can be found here . So now the question becomes what will happen to Tower Semiconductor's (which will soon be Intel's) India fab project through NOV?
Only time can give us a precise and confirmed answer, NOV or Tower or Intel is less likely to publicly speak about this for a while, especially as long as the government of India doesn't confirm about the project. However, a few points are noteworthy.
A) In the announcement about the Intel acquisition of Tower, it is said that "The transaction is expected to close in approximately 12 months.... IFS and Tower Semiconductor will run independently until deal closure".
B) Tower Semiconductor is also part of an ongoing joint effort together with STMicroelectronics to build a similar fab in Italy and Intel's CEO Pat Gelsinger has welcomed that partnership. Gelsinger was quoted as saying, "Tower has global operations, including a relationship with ST Microelectronics to share a manufacturing facility in Italy, that Intel will benefit from".
The Italy project has already taken off and construction is ongoing where as for India, ISM has not given any indication so far about an application from NOV with Tower as partner being received, much less by when it will be able to complete all scrutiny and give a formal approval assuming compliance with all eligibility criteria.
Getting this project to take off within the next two or three months may help to get it to a "point of no return" stage by the time Tower semiconductor formally becomes IFS. If one is to believe Intel CEO's appreciation of global operations is something he is willing to consider for India also, this may even open up the possibility of Intel itself willing to add on a logic fab possibly with a 10-16nm node or at least a 22-28nm range to the current proposal of 65nm node.
‘Incremental’ fabs cost less compared to building from scratch — a good example is the latest news about ‘JASM’ — original estimate was $7 billion project cost for 45,000 WSPM capacity with the most advanced nodes being 22nm and 28nm. The recent addition of another 10,000 WSPM capacity and including 12nm and 16nm FINFET technology also to the project has given a revised estimate of $8.6 billion, only a 22.8 per cent increase.
A 65nm Analog fab up and running at the earliest will not just break the ice and prove India's capability, it could be the beginning of many more to come in future. If in the next four-five years, India has to start reducing what could be a $60 billion or more import dependency on chips the Narendra Modi-led government will have to act quick and decisive now.
Arun Mampazhy has a BTech from IITM and MS from University of Maryland in semiconductor fabrication and over a decade of industry experience. His dreams of seeing a commercial fab takeoff in India has changed from black and white to colour over two decades. He can be reached via email nanoarun(at)gmail(dot)com or @nano_arun on twitter. Views expressed are personal.
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