Chipmaking proposals worth $8-12 bn of investments in the pipeline : IT Minister Ashwini Vaishnaw

BENGALURU : At least three semiconductor units, including packaging and fabrication, will bring in a cumulative investment of $8 billion – $12 billion under the government’s capex-linked incentive scheme for the chip industry in the coming months, Union Minister Shri Ashwini Vaishnaw said on November 28, highlighting the progress the government is making in the nascent industry.

“In another few months, I can share that we will get at least three more units, fabricating advanced technologies of chips in the country,” Vaishnaw said in a fireside chat with AMD India head Jaya Jagadish held during the inauguration of the semiconductor design firm’s largest global design centre in Bengaluru.

“Our focus has been on creating the ecosystem and making sure to get the first few units right so that the confidence in the country’s ability to develop this new industry grows,” Vaishnaw said. In a subsequent press briefing, Vaishnaw said that they can see “at least two very good proposals for fabrication and OSAT (Outsourced Semiconductor Assembly and Test) in the coming few months”.

“The applicants have the freedom to choose whichever locations they would like to set up their units. They are interacting with various state governments such as Tamil Nadu, Karnataka, Telangana, Gujarat, and Uttar Pradesh. We hope that in the coming few months they finalise the locations.” he said.

Vaishnaw said this sector, which is a new industry for the country, will grow as a major contributor to the entire developing manufacturing base of electronics, telecom and defense electronics.

This development comes at a time when India is trying to attract major semiconductor players to set up chip fabrication and assembling plants in the country with a $10 billion subsidy programme.

In September, semiconductor giant Micron held a groundbreaking ceremony at the Sanand industrial area of Gujarat to mark the commencement of construction on the first phase of a $2.75 billion semiconductor testing and packaging plant. The total cost of the plant is $825 million (around Rs 6,760 crore) from Micron and the rest from the government in two phases, the company said at the time of the ceremony.

Semiconductor equipment maker Applied Materials also said it would invest $400 million to design chip making machinery in the country in June 2023. The union minister said that many of the ecosystem partners have started coming after the construction work of the first unit started. This includes substrate manufacturers, chemical suppliers, PCBA (printed circuit board assembly) companies.

“In this entire semiconductor universe today, a large part will be played by the gallium nitride and silicon carbide segment. That is the segment which is a high voltage power electronics oriented segment. That segment will be catering to telecom manufacturing, telecom equipment, power electronics, electric vehicles and the chips that go in practically all the consumer electronics that you see in your home. That’s a rapidly emerging sector. So, we will be focusing on that sector as well along with Silicon” he said.

The minister said this gives them the opportunity to become a global leader in certain segments of the semiconductor industry.