India announces the construction of the countrys first semiconductor factory

India announces the construction of the country’s first semiconductor factory

In the coming weeks, India will announce the construction of its own semiconductor fab as the country seeks to become more self-sufficient in its semiconductor supply amid supply chain disruptions caused by the pandemic and ongoing US semiconductor export restrictions on China.

    Image source: Naveed Ahmed/

Image source: Naveed Ahmed/

The country intends to promote the development of the semiconductor industry in the next three to four years with the government’s active support in the development of the related ecosystem. Three companies, including a joint venture between Vedanta-Foxconn, the International Semiconductor Consortium (ISMC) and Singapore’s IGSS Ventures, are vying for promised $10 billion in financial support and awaiting official approval to set up semiconductor manufacturing facilities. According to the Indian authorities, the decision on the approval of projects and their financing will be announced in the next few weeks. By encouraging local manufacturing, India will be able to reduce its dependency on imports and improve its ability to deal with global disruptions in supply chains. Additional jobs are created. In addition, the initiative will contribute to economic growth in general.

The country is known to have already struggled during the pandemic, when disruptions in global supply chains led to semiconductor shortages and rising prices. In addition, the United States has imposed restrictions on the export to China of chips and equipment for their production, including semiconductors for servers, AI systems and other similar-level solutions. Furthermore, the United States actually forced its allies to act in a similar way, limiting the PRC’s ability to manufacture and export its own semiconductors and products using them.

If approved by Indian authorities, the Vedanta-Foxconn joint venture will set up a semiconductor and display plant in Gujarat’s Dholera Special Investment Zone. ISMC, a consortium of Abu Dhabi, Next Orbit Entures and Israel’s Tower Semiconductor now bought by Intel, has signed a memorandum of understanding with the Karnataka government to build a $3 billion plant there serving Tamil Nadu construction has been selected. Although all three consortia claim benefits, only one company receives the funds. According to some sources, Vedanta-Foxconn will likely be their recipient, and IGSS may not expect to gain much.

India offers financial and other incentives, including infrastructure assistance and streamlined rules for potential manufacturers, which should attract global players looking to build semiconductor fabs amid inevitable competition from mainland China, Taiwan and South Korea.

Last September, the Indian Ministry of Electronics and Information Technology announced that the country will provide financial support equal to 50% of the cost of building a facility to companies that receive government approval and are able to implement such resource-intensive projects . The central government will work with state authorities to create special high-tech clusters with developed infrastructure for the construction of production. India Semiconductor Mission, an independent agency, was established last year to implement a long-term strategy to develop a sustainable semiconductor and display manufacturing ecosystem.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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