After its first proposal failed to get the Centre’s approval, the Vedanta-Foxconn joint venture (JV) has submitted a fresh proposal to set up a semiconductor fabrication plant in India under the central government’s ambitious Rs 76,000 crore chip-making incentive scheme. According to sources at the Ministry of Information Technology, the JV’s new proposal is to set up a 40 nanometre (nm) fab, as opposed to its initial plans of setting up a 28 nm process, which faced roadblocks over finding a technology partner. “We have submitted the application as per the revised guidelines. We are committed to building a world class fab in India,” Vedanta said in a statement to The Indian Express. While India has received a proposal from US chip-maker Micron Technologies to set up a packaging plant in the country, its Rs 76,000 crore scheme to boost the semiconductor ecosystem has yet to receive any marquee name to set up a fab in the country. To that end, it has received three proposals – from a Vedanta-Foxconn JV, international consortium ISMC, which included Israel-based Tower Semiconductor, and Singapore-based IGSS Ventures. However, The Indian Express earlier reported that all three proposals were facing roadblocks. Vedanta-Foxconn JV, it is learnt, had initially applied for a 28 nm chip 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. The JV had earlier 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 for the 40 nm process. The smaller the node, the more challenging it is to manufacture chips – as a general principle, a number of transistors need to be attached to a certain surface area which makes the manufacture of smaller nodes a more complicated process – and significantly more expensive – than the higher-end legacy nodes. The higher-end nodes are typically used for applications ranging from automotive, telecom, and lower-end laptops and desktops. According to the government, this segment constitutes around 50 per cent of the total semiconductor market. 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 – less than half of what it would cost for a 28 nanometer process. ISMC, backed by Abu Dhabi-based Next Orbit and 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. 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.
