Due to a lack of applications from top global semiconductor companies, Economic Times, citing unnamed officials, has reported that India has decided to extend the window for application for a US$10 billion semiconductor fab incentive scheme.
Economic Times quoted officials familiar with the matter as saying that the Indian government is in discussions with major chip manufacturing companies, such as Intel, Samsung Electronics, GlobalFoundries, and TSMC, to seek their proposal to invest in India, and there is no deadline for the chip fab incentive.
India announced a US$10 billion semiconductor investment plan in December 2021, providing a subsidy of up to 50% of project cost to those who set up fabs locally and open a 45-day application window starting from January 1, 2022. The application window was supposed to end on February 15, but Economic Times reported that there were only a handful of proposals so far.
Abu Dhabi-based Next Orbit Ventures is one of the applicants and has expressed interest in investing US$3 billion with Israel-based Tower Semiconductor to build a 65nm fab in Dholera, Gujarat. Intel announced a US$5.4 billion acquisition of Tower Semiconductor right on February 15.
On the other hand, Foxconn issued a press release saying it had signed an MOU with Vedanta to set up a joint venture for manufacturing semiconductors in India on February 14. However, Nikkei Asian Review, citing people familiar with Foxconn's plan, reported that the joint venture still depends on central and state government grants and bank loans.
India has been actively building an electronics ecosystem in recent years, but semiconductor production has been almost absent despite growing demand. According to statistics from the Ministry of Commerce of India, India's import value of ICs increased from US$5,063.13 million in fiscal 2021 (April 2020 to March 2021) to US$5,764.60 million in the first nine months of fiscal 2022.
