India in talks with 4 semiconductor companies to set up fabs here: Report

Four global semiconductor companies are in talks with the Centre to set up fabs in India, a report in the Economic Times (ET) said. The Centre is also likely to invite a second round of applications for setting up such a facility under the $10 billion incentive package by mid-March.

Among the countries that have shown interest are New York-based GlobalFoundries and a “major” Korean semiconductor firm.

“Apart from applications that the government has at this point, there are four large opportunities, which are in the final stage. So, as and when we open the second window, they will come,” a person aware of the matter told ET.

The Centre invited proposals for setting up semiconductor facilities in India last year. In December 2021, it announced a $10 billion package to incentivise the manufacturing of chips in India. The India Semiconductor Mission (ISM) was made the nodal agency of the program.

The Centre is offering a 50 per cent subsidy on fab units, and states are offering a 10-25 per cent subsidy over and above the central share.

In the first round of applications, five companies had shown interest in setting up chip factories in India. This included three proposals for chip manufacturing, including by the International Semiconductor Consortium (ISMC) consortium led by Abu-Dhabi-based Next Orbit Ventures. The other two applicants are Singapore-based IGSS Ventures and the Vedanta-Foxconn combine. Rajesh Exports and Vedanta-Foxconn proposed to set up display fabs.

Out of these, ISMC, IGSS Venture and Rajesh Exports are unlikely to get the approval, sources told ET.

The report added that the Centre is keen to have Taiwan’s Foxconn set up a manufacturing plant in India. Moreover, it wants Foxconn to take the lead in its venture with Vedanta.