45 Day Window For $10 Billion Chip Manufacturing Plan Was A Mistake, Says MoS Rajeev Chandrasekhar 

The Centre’s decision to keep the application window for semiconductor fab proposals open for just 45 days in 2022 was an error, Minister of State for Electronics and IT Rajeev Chandrasekhar said. Within that short period, the government received three proposals to manufacture chips in India but none of them managed to clear the selection criteria laid down by the India Semiconductor Mission (ISM).  

Following this, the Centre re-opened the window for new applications in June 2023. “The window for fab proposals was restricted to 45 days earlier. In hindsight, that was an error. Now the window is open and will be kept open for as long as the resources allocated to the semiconductor mission are available,” the minister told Outlook Business. 

In December 2021, the Centre had announced a $10 billion (Rs 76,000 crore) package to incentivise the manufacturing of semiconductors within India. The three proposals submitted to the ISM were from: Singapore-based IGSS Ventures, international consortium ISMC, and a joint venture between Anil Agarwal’s Vedanta group and Taiwanese contract manufacturer Foxconn. 

Also read: Chip Design Incentives May Be Extended Beyond Start-Ups To Include Bigger Firms, Says Rajeev Chandrasekhar

Although the Vedanta-Foxconn combine was said to have secured a manufacturing license agreement for 40 nanometre technology node, the joint venture eventually fell through. During the recently concluded Semicon India 2023 conference held in Gandhinagar, Vedanta chairman Anil Agarwal Agarwal said that his group remains committed to building the first semiconductor fab in India. "In 2.5 years, we will give you Vedanta made-in-India chips," Agarwal told reporters. He added that his group has identified a technology partner for chip manufacturing and is close to finalising a deal.  

When asked whether technology partners are expected to have an equity stake in fab projects, MoS Chandrasekhar told Outlook Business that the criteria for fab proposals mentioned in 2022 remains the same. “Applicants have to be either operators of fabs, or if they are investors, they must have a license for commercial grade manufacturing technology for the tech node they propose to implement,” the minister said. 

The India Semiconductor Mission, a nodal agency under the Ministry of Electronics and IT (MeitY), recently held a three-day Semicon India conference aimed at advancing India’s aspirations of building an indigenous chip ecosystem. Although India is yet to have a successful fab proposal, the country has already tasted success in some form with US-based Micron Technology committed to establishing a chip assembly, testing, marking and testing (ATMP) facility in the country. 

Along with other big investments in chip research and development, the Micron project is expected to boost India’s chances of having a domestic chip manufacturing facility soon. On the sidelines of Semicon India 2023, Union Minister Ashwini Vaishnaw said, “I can, with a high level of confidence, say that in the coming 5-7 years, India will have minimum 5 fabs.”