indian semiconductor mission: India invites semiconductor suppliers to set up shop in India

Government officials are meeting with representatives of industries such as ultra-pure copper, aluminium, water and gases, and others to understand their requirements for setting up units around the proposed semiconductor manufacturing units, people aware of the development told ET.

Representatives from these companies had first come to visit the sites of the proposed semiconductor units in Gujarat, Karnataka, and Tamil Nadu in February, a senior official from the Ministry of Electronics and Information Technology (MeitY) said.

Executives from some of these companies visited these sites again last month and were accompanied by central and state government officials who noted down some of the concerns raised by them, one of the officials said.

“These industries will need to be set up in proximity to the proposed semiconductor units,” the official said. “Some of these raw materials cannot be transported over long distances due to fears of impurities getting in. We are trying to understand the exact requirements of these industries.”

The entire process of semiconductor manufacturing requires roughly 1,200 different kinds of raw materials, the official said.

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The idea behind inviting these industries to set up units in India instead of relying on imports was to ensure the fabrication of chips began on time and would not be impacted as much by any disruptions in the global supply chains, another government official said.“There are some raw materials such as some rare earth minerals for which we have no option but to depend on imports. For others, which can be manufactured domestically, we want a complete ecosystem,” the official said.

In December 2021, the Centre had announced a $10-billion (roughly Rs 76,000 crore) package to promote semiconductor manufacturing in India. According to the scheme announced in 2021, the central government proposes to offer incentives amounting to 50% of the total cost of the project.

Governments of the states where the units will be located are offering more incentives, taking the total value of subsidies and incentives to roughly 70-75% of the total project cost.

So far, the Centre has received three proposals for chip manufacturing, including from the International Semiconductor Consortium (ISMC) led by Abu Dhabi-based Next Orbit Ventures. The other two applicants are Singapore-based IGSS Ventures and the Vedanta-Foxconn combine.

Government officials are meeting with representatives of industries such as ultra-pure copper, aluminium, water and gases, and others to understand their requirements for setting up units around the proposed semiconductor manufacturing units, people aware of the development told ET.

Representatives from these companies had first come to visit the sites of the proposed semiconductor units in Gujarat, Karnataka, and Tamil Nadu in February, a senior official from the Ministry of Electronics and Information Technology (MeitY) said.

Executives from some of these companies visited these sites again last month and were accompanied by central and state government officials who noted down some of the concerns raised by them, one of the officials said.

“These industries will need to be set up in proximity to the proposed semiconductor units,” the official said. “Some of these raw materials cannot be transported over long distances due to fears of impurities getting in. We are trying to understand the exact requirements of these industries.”

The entire process of semiconductor manufacturing requires roughly 1,200 different kinds of raw materials, the official said.

Discover the stories of your interest

The idea behind inviting these industries to set up units in India instead of relying on imports was to ensure the fabrication of chips began on time and would not be impacted as much by any disruptions in the global supply chains, another government official said.“There are some raw materials such as some rare earth minerals for which we have no option but to depend on imports. For others, which can be manufactured domestically, we want a complete ecosystem,” the official said.

In December 2021, the Centre had announced a $10-billion (roughly Rs 76,000 crore) package to promote semiconductor manufacturing in India. According to the scheme announced in 2021, the central government proposes to offer incentives amounting to 50% of the total cost of the project.

Governments of the states where the units will be located are offering more incentives, taking the total value of subsidies and incentives to roughly 70-75% of the total project cost.

So far, the Centre has received three proposals for chip manufacturing, including from the International Semiconductor Consortium (ISMC) led by Abu Dhabi-based Next Orbit Ventures. The other two applicants are Singapore-based IGSS Ventures and the Vedanta-Foxconn combine.