Karnataka may get India’s first semiconductor fab facility: Report

Karnataka may become India’s first state to have a semiconductor fab. The International Semiconductor Consortium’s (ISMC’s) proposed $3 billion fab may start construction as early as February 2023, said a report in Mint.

The ISMC will make 40-65 nanometre analog chips which will cater to “defence and auto sectors” and to some other sectors, the report added.

“We will probably become the first state in India to have a semiconductor fab. ISMC has the technology and the capability. Subject to the central government’s approval, we hope to see work starting on this plant from February,” Karnataka Minister for Information Technology, Electronics, and Skills Development, CN Ashwath Narayan, was quoted as saying by Mint.

The Centre had announced subsidies of up to 50 per cent of the project costs for semiconductor manufacturers under its Rs 76,000 crore Production-linked Incentive (PLI) scheme in 2021. Moreover, the latest set of restrictions imposed by the US on sales of semiconductor-making equipment to China has encouraged companies to shift to India.

The report added that India already has expertise in designing chips but the lack of fab pushes it to depend on imports.

ISMC, which is a joint venture between UAE’s Next Orbit Ventures and Israel’s Tower Semiconductor, will be among the three consortia shortlisted by the Centre for incentives. Tower Semiconductor was acquired by Intel Inc in February.

Foxconn and Vedanta earlier this year announced setting up a semiconductor facility in Ahmedabad. Singapore’s IGSS Ventures will also set up a $3.2 billion semiconductor park in Tamil Nadu.

All of the projects will be provided with government incentives. It would take about 4-5 years, once the construction starts, for the ISMC’s plant to become operational.