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The Centre will reopen the window for applying to its Rs 76,000 crore semiconductor manufacturing plan as the three applications it had received under the previous window last year have run into hurdles in setting up their respective plants.
The government opened the first window for entities to apply to the scheme in January 2022 and closed it in 45 days. The new window, set to open on June 1, will remain until December 2024.
Rajeev Chandrasekhar, Minister of State for Electronics and IT, told The Indian Express the window for re-applying to the scheme was extended further so that the government can receive more proposals after it had sweetened the scheme last September by allowing for uniform fiscal support of 50 per cent of project cost for semiconductor fabs across technology nodes and display manufacturing.
The government had received three proposals to set up a fab in the country – from a Vedanta-Foxconn joint venture, international consortium ISMC and Singapore-based IGSS Ventures. However, at the moment, the Vedanta-Foxconn proposal is the only one that the Centre has on its table, and even that has been unable to find a partner that could licence them the technology to manufacture 28-nanometre chips.
Vedanta-Foxconn, it is learnt, had initially applied for a 28-nanometre semiconductor manufacturing plant in January 2022, but it has yet to communicate to the government whether it has secured the technology. Neither Vedanta nor Foxconn have the technology to manufacture such chips and will need to licence it from another company. Vedanta, the metals and mining conglomerate, is struggling to reduce its debt.
Vedanta will have to re-apply to the manufacturing scheme detailing its plan of producing chips with a node size of 40 nanometres, a senior government official said, requesting anonymity. The joint venture has indicated to the government that it is in the process of licensing manufacturing-grade technology for the node size from either the Netherlands-based STMicroelectronics or GlobalFoundries.
It is learnt that Vedanta’s conversations with STMicroelectronics are currently under a deadlock over the latter’s level of participation in the joint venture – whether it will only licence its technology or acquire a stake in the consortium.
If the joint venture manages to secure the right technology partners for the project, its 40-nanometre plant is expected to cost around $3.5 billion to $4 billion.
According to the official, after accounting for the Centre’s support and subsidies offered by the Gujarat government, the plant is expected to cost the joint venture around $1.2 billion. Vedanta did not respond to a request for comment until publication.
According to the official, ISMC, backed by Abu Dhabi-based Next Orbit and Israel’s Tower Semiconductor, has asked the Centre not to consider its proposal owing to a pending merger between Intel and Tower Semiconductor. The merger continues to be delayed more than a year after its first announcement.
Singapore-based IGSS Venture’s proposal was not found to be up to the mark by the government’s advisory committee and, as a result, is on the backburner, it is learnt.
