Centre Opens Second Application Window For Rs 76,000 Crore Semiconductor Manufacturing Plan

Centre Opens Second Application Window For Rs 76,000 Crore Semiconductor Manufacturing Plan

by Swarajya Staff - Thursday, June 1, 2023 11:59 AM IST
Centre Opens Second Application Window For Rs 76,000 Crore Semiconductor Manufacturing PlanIndian semiconductor fab (Representative Image) (Image Credit: ESSCI)

The Centre has reopened the window for applying to its Rs 76,000 crore semiconductor manufacturing plan.

The previous window last year received three applications. However, these applications faced difficulties in setting up their respective plants.

The government offered the first window for scheme applications in January 2022, and closed it in 45 days. A second window will open today (1 June) and remain available until December 2024.

Rajeev Chandrasekhar, Minister of State for Electronics and IT, announced that the window for re-applying to the scheme has been extended. The extension aims to encourage more proposals from interested parties.

The government had made amendments to the scheme in September, including uniform fiscal support of 50 per cent of the project cost for semiconductor fabs and display manufacturing across different technology nodes, Chandrasekhar told The Indian Express in an interview.

This move was intended to attract more participation in the program.

The government had received three proposals to set up a fab in the country:

  • Vedanta-Foxconn joint venture

  • International consortium ISMC

  • Singapore-based IGSS Ventures

Currently, the only proposal present with the Centre is from Vedanta-Foxconn, but they are unable to find a partner to licence them the technology for manufacturing 28-nanometre chips.

Vedanta-Foxconn sought to establish a 28-nanometer semiconductor plant in January 2022. However, there is no confirmation yet if they have secured the technology to execute it. They plan to license the required technology from other companies as they are not equipped for the task.

According to the report, Vedanta will need to submit a new application to manufacture chips with a 40 nanometre node size, said a senior government official.

The joint venture has informed the government that it's seeking to license technology from either STMicroelectronics or GlobalFoundries.

Vedanta is also grappling with the challenge of resolving its debt issues amid the situation.

The 40-nanometre plant of the joint venture is anticipated to cost $3.5-4 billion if they can obtain the appropriate tech partners.

The plant's cost is estimated to be around $1.2 billion for the joint venture, after accounting for subsidies from the Gujarat government and assistance from the Centre.

According to the report, Vedanta's discussions with STMicroelectronics have reached a deadlock. The impasse revolves around STMicroelectronics' level of involvement in the joint venture.

The main point of contention is whether STMicroelectronics will solely license its technology or acquire a stake in the consortium.

ISMC has requested the Centre not to consider its proposal due to the ongoing delay with the merger between Intel and Israel's Tower Semiconductor, as per the officials.

The proposal put forward by Singapore-based IGSS Venture did not meet the expectations of the government's advisory committee. As a result, their proposal has been put on hold, said the report.

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