India gets US$20.5 billion worth of proposals for fabs, display units

India gets US$20.5 billion worth of proposals for fabs, display units

Gov to provide fiscal incentives for units.

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The Indian government has announced that it has received five applications worth US$20.5 billion to set up semiconductor and display fabs in the country.  

The applications are part of what is called the India semiconductor mission, which set up a dedicated institution, Semicon India Programme (SIP) in December last year with a corpus fund of US$10 billion.

According to India’s Ministry of Electronics and Information Technology (MeitY), the program aims to provide incentive support to companies and consortiums which are interested in setting up silicon semiconductor and display fabs as well as other components of the semiconductor industry chain, including design and packaging.

The government has received three proposals for setting up semiconductor fabs in India.

One is from a joint venture (JV) between an Indian multinational mining company, Vedanta, and Taiwan’s Foxconn.

The other is a proposal by Singapore-based IGSS Ventures which is a technology investment holding company.

The final one is from ISMC Digital Fab, a company set up by Abu Dhabi-based Next Orbit Ventures, a multi-asset fund manager.

The applications are for setting up 28 nanometres (nm) to 65 nm fabs with a capacity of approximately 120,000 wafers per month.

The combined projected investment for the three fabs is estimated to be US$13.6 billion wherein the proposals have sought financial support worth US$5.6 billion from the SIP fund.

Display panel market

The government has received two applications for setting up a generation 8.6 TFT LCD fab and a sixth-generation display fab for the manufacture of state-of-the-art Amoled display panels that are used in advanced smartphones.

India’s display panel market is estimated to be around US$7 billion and is expected to grow to US$15 billion, according to MeitY.

Displays account for more than 25 percent of the bill of materials (BoM) in smartphones and more than 50 percent in LCD/LED TVs. 

Two companies, Vedanta and Elest Private Ltd, have proposed to set up the two display panel manufacturing units with a projected investment of US$6.7 billion and have sought the support of US$2.7 billion from the government scheme.

The five proposals have been issued acknowledgement letters by India Semiconductor Mission (ISM) that has been set up as an independent institution to spearhead the SIP.

ISM will coordinate with the companies who have reached out to various state governments in India with a request for access to world-class infrastructure.

It will work closely with the state governments to establish high-tech clusters with 300-500 acres of developed land and the required infrastructure as well as the setting up of common facility centres for testing and certification.

For compound semiconductors, which are a mixture of two chemical elements, like gallium-arsenide (GaAs), an Indian company, Ruttonsha International Rectifier Ltd, has registered its interest in setting up a unit.

For outsourced semiconductor assembly and test (OSAT) facilities, four companies - SPEL Semiconductor Ltd., HCL, Syrma Technology, and Valenkani Electronics, have applied for incentives under the scheme for semiconductor packaging.

Three companies, Terminus Circuits, Trispace Technologies and Curie Microelectronics, have submitted applications under a design-linked incentive scheme.

Commenting on the country’s ability to absorb new technologies that these investments may bring in, Forrester’s VP and research director, Ashutosh Sharma, said there were parts of the semiconductor value chain where the country already has significant expertise.

These include, among others, semiconductor intellectual property (SIP) and design services, and almost all major chip majors have their research and development (R&D) labs in India, he said.

Sharma added that the country also has expertise in design and testing of printed circuit boards (PCBs), building system-in-packages (SIPs), and in semiconductor assembly, testing, marking and packaging (ATMP) “but there is a lack of capacity and scale which reduces its price-competitiveness”.

He said as the government “solves the capacity issue through the production linked incentives (PLI) schemes in electronics manufacturing the demand for locally manufactured silicon would also pick up”.

India has become the hub for semiconductor design with nearly 2000 chips being designed per year and more than 20,000 engineers are working in various aspects of chip design and verification.

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