April 2 2021: The government of India has through a notification, once more extended to April 30, the last date of submission for expression of interest “ for setting up or expansion of existing Semiconductor Wafer / Device Fabrication (FAB) facilities in India or acquisition of Semiconductor FABs outside India.”
Past attempts to interest industry in setting up fabs in India have largely fallen by the wayside, as technology corporates were unhappy with the bureaucratic hassles, constantly changing regulations and unfriendly import-export policies which made such high investment, high risk investments unattractive.
However the worm seems to have turned: thanks to a sudden shortage faced by the auto industry in the country in its requirement for semiconductor devices, the burgeoning business of assembling mobile phones in India plus the Indian government’s urgency in finding indigenous options to China-origin semiconductors.
A Reuters story of March 31, claimed to ne an “exclusive” quotes an unnamed government official as saying ““The government will give cash incentives of more than $1 billion to each company which will set up chip fabrication units…. We’re assuring them that the government will be a buyer and there will also be mandates in the private market (for companies to buy locally made chips).”
Globally, Taiwan is home to the world’s largest concentration of semiconductor fads, with companies like TSMC dominating the business. Interestingly India’s push to encourage indigenous manufacture of semiconductors comes at a time when even established and well funded leaders in the semicon business like Intel, have announced that they will stop making their own chips and will outsource production to agencies – like TSSMC.
It remains to be seen if this time, the Indian government’s invitation to make chips here , dangling a 1 billion dollar carrot, turns out for industry platers to be a Godfather-like ‘offer they can’t refuse’.