Govt invites fresh bids for $10 bn semiconductor fab scheme

Minister of state for electronics and information technology Rajeev Chandrashekhar outlined the revised direction in light of the limited response to the initial 45-day application window for the 28nm fabs in January 2022, which only garnered three applications. The renewed strategy allows for fresh applications from both new and existing players who can operate at various nodes.

“The first window for more expensive 28nm fabs was kept open for 45 days only in Jan 2022 and received three applicants that were evaluated by ISM and its advisory group. The strategy ow is also encouraging mature nodes of >40nm – current n new players may apply afresh in various nodes that they hv technology for. It is expected that some of the current applicants will reapply and new fresh investors will also apply,” the minister said.

His comments come in response to a Bloomberg report which said that Vedanta-Foxconn semiconductor plant, the leading applicant among the three that had applied last year, would not get approval from the government.

Vedanta-Foxconn joint venture under which the Anil Agarwal promoted Vedanta Resources and world’s largest contract manufacturer Foxconn’s semiconductor arm had jointly announced to invest $20 billion towards setting up a semiconductor fab plant, a display fab plant and outsourced semiconductor assembly and test (OSAT) plant, in Dholera, Gujarat. The bulk of the investments are meant for the semiconductor fab plant.

The other applicants included the International Semiconductor Consortium (ISMC), a partnership between Abu Dhabi’s Next Orbit Ventures and Tower Semiconductor of Israel (now under acquisition by Intel), and IGSS Ventures from Singapore.

Mint had reported earlier this year that ISMC will resubmit its application under the modified scheme where the subsidy was increased to 50% compared to 30% earlier, and manufacturing of higher level of nodes – above 40 nm – were permitted.

The three consortia initially submitted their applications under the $10 billion Semicon India program, launched by the government in December 2021. Despite anticipation that Vedanta-Foxconn would be the first approved, none of the initial three proposals have received the nod yet.

The Vedanta-Foxconn proposal was expected to be the first amongst the three to get the government nod, according to government and industry sources. As things stand, none of the three proposals have been approved so far.

The ministry of electronics and information technology said in a statement on Wednesday that the government had decided to invite new applications for setting up of semiconductor fabs and display fabs in India from June 01, 2023 under the Modified Semicon India Programme, which will remain open till December 2024.

“All applicants who had applied under the scheme for setting up of Semiconductor Fabs and Scheme for setting up of Display Fab (earlier schemes) are allowed to submit applications under Modified Scheme for setting up of Semiconductor Fabs and Modified Scheme for setting up of Display Fabs after incorporating suitable modification in their proposals,” the statement noted.

It added that application window of Design Linked Incentive or DLI scheme will also remain open till December 2024. The ministry added that till date 26 applications have been received under DLI scheme and five had been granted approval.

Updated: 31 May 2023, 01:37 PM IST