India’s Big Push For Small Chips: Last Day For Submission Of EoI For Setting Up Semiconductor Fabrication (FAB) Plants Pushed Back

The Union government has once again extended the deadline for submission for expression of interest (EoI) from companies for setting up a semiconductor fabrication unit for a second time. The new date for the submission of the proposal will be 31 April 2020.

The government had earlier extended the last date of submission for that expression of interest to end-March from 31 January.

In a move aimed at incentivising and attracting investment for setting up of chip manufacturing in India, the Union Ministry of Electronics and Information Technology (MeitY) issued an Expression of Interest (EoI) notice on 16 December for setting up / expansion of existing Semiconductor wafer / device fabrication (FAB) facilities in India or acquisition of Semiconductor FABs outside India.

MeitY had asked the interested firm to can indicate the kind of financial support desired from the Government of India, including Grant-in-Aid (GIA), Viability Gap Funding (VGF) in the form of Equity and / or Long-Term Interest Free Loan (LIFL), tax incentives, infrastructure support, etc.

“ Government of India is keen to incentivize and attract investment in setting up of Semiconductor FABs in India. This assumes significance in view of the fact that India is poised to increase its share in global manufacturing of Mobile Phones, IT Hardware, Automotive Electronics, Industrial Electronics, Medical Electronics, IoT and other devices in the near future as it aspires to have USD 400Bn of electronics manufacturing by the year 2025.” the EOI document said.

In a move to boost high-technology manufacturing including semiconductors in the country, the government on March 19 set up a committee to facilitate investments.

“In order to facilitate investments and promote manufacturing in technology-intensive sectors, including semiconductors, the government of India has decided to constitute an empowered committee for manufacturing in high-technology areas,” the government said in its notification.

The Union minister of commerce and industry will be the chairperson of the 10-member committee. The panel includes Tata Sons chairman N. Chandrasekaran; Bharat Forge chairman Baba Kalyani; Mahindra Group managing director and CEO Pawan Goenka; Zoho Corporation CEO Sridhar Vembu; and Anshuman Tripathi, a semiconductor domain expert.

India is also reportedly offering more than $1 billion in cash to each semiconductor company that sets up manufacturing units in the country as it seeks to build on its smartphone assembly industry.

Reuters quoted a senior government official as saying that the government will give cash incentives of more than $1 billion to each company which will set up chip fabrication units "We're assuring them that the government will be a buyer and there will also be mandates in the private market (for companies to buy locally-made chips)."

A consortium of investors led by Abu Dhabi-based fund Next Orbit Ventures has reportedly expressed keen interest in setting up in India

India has previously attempted to attract semiconductor players but firms were deterred by India's infrastructure challenges, unstable power supply, bureaucracy and poor planning.