India is vying against its strategic allies, including the US and Europe, to attract semiconductor manufacturers. Offering a 50% capital expenditure subsidy under a $10 billion incentive scheme at the central level, supplemented by additional incentives from state governments, the country aims to lure chipmakers.
Despite initial setbacks, recent proposals from industry giants like the Tata Group and Tower Semiconductor have reignited hopes of establishing a semiconductor fabrication facility in India. Minister of State for Electronics and IT, Rajeev Chandrasekhar, confirmed that these firms have submitted applications to set up foundries within the country.
If approved by the government's India Semiconductor Mission (ISM), these proposals could culminate in the establishment of a long-awaited fabrication plant in India. Beyond bolstering domestic employment opportunities, such a development would enhance India's standing in the global technology arena, providing leverage in the ongoing chip wars shaped by China and the United States.
India's semiconductor incentive scheme encompasses various aspects of the ecosystem, including full-fledged foundries, packaging facilities (ATMP), and assembly/testing plants (OSAT). Notably, Micron Technology has received approval for its $2.75 billion ATMP plant in Gujarat.
In the foundry domain, both the Tata Group and Tower Semiconductor have submitted proposals, collectively amounting to an investment of approximately $22 billion. Tower Semiconductor plans to establish a plant worth $8 billion, focusing on producing chips ranging from 65 nm to 28 nm. The Tata Group, potentially partnering with United Microelectronics Corporation (UMC) or Powerchip Semiconductor Manufacturing Corporation (PSMC), aims to contribute significantly to this investment.
Additionally, in the OSAT sector, CG Power and Industrial Solutions has announced a joint venture with Renesas Electronics America and Stars Microelectronics to establish a semiconductor assembly and testing plant in India. Kaynes Technology has also submitted a proposal for an OSAT facility.
Furthermore, the Tata Group has applied for an ATMP plant, while HCL has partnered with Foxconn in its application for a similar facility. These developments underscore India's concerted efforts to bolster its semiconductor manufacturing capabilities, potentially reshaping its position in the global technology landscape.