The Indian government is reportedly planning to reopen the application process for a $10 billion incentive program aimed at attracting global chip manufacturers to set up operations in the country.
The move comes as India’s IT Minister Ashwini Vaishnaw embarks on a three-day visit to the United States, where he is expected to meet with leaders of prominent chip companies, including Intel, Micron, and Global Foundries, to encourage investment in India’s semiconductor industry.
During his visit, Minister Vaishnaw has already held discussions with Semiconductor Equipment and Materials International (SEMI), a leading trade organization for the semiconductor and electronics industry, to explore opportunities for collaboration and discuss India’s Semiconductor Mission.
The $10 billion incentive program was initially approved by the Indian government in December 2021 to foster the development of a robust semiconductor ecosystem within the country. The first round of applications closed in February 2022, attracting three applications for chip manufacturing and two for display manufacturing.
Among the applicants for chip manufacturing were Vedanta in partnership with Foxconn, IGSS Ventures Pte from Singapore, and ISMC, a proposal by NextOrbit Ventures in collaboration with Tower Semiconductor. These applications aimed to establish semiconductor fabs ranging from 28 nm to 65 nm with varying capacities.
While the approval status of the first-round applications remains unknown, reports suggest that the government plans to reopen the application process after a gap of 15 months. It is uncertain whether any of the initial applications will be approved, and industry analysts speculate that some may require adjustments to meet cost expectations set by the government.
Arun Mamphazy, an independent semiconductor analyst, explained, “We don’t know yet if any applications in the first round are being approved or not. Quite likely, IGSS is definitely not going to be approved, ISMC is also very less likely. Vedanta-Foxconn, maybe, if it gets approved, then it depends on what cost they have approved at.”
There is also the possibility that none of the applications from the first round meets the government’s criteria, particularly in terms of cost. It is worth noting that the applicants were allowed to revise their submissions after the initial deadline, which could potentially raise legal concerns regarding the closed nature of the program.
Sources close to the ministry revealed that the government intends to learn from past experiences and avoid setting a strict timeline for future application submissions. Instead, the process will remain open-ended, allowing interested companies to apply when they are fully prepared.
As the Indian government seeks to attract global chip manufacturers, the reopening of the application process demonstrates its commitment to establishing a robust semiconductor ecosystem in the country and fostering technological growth and innovation.
