India reportedly expresses reservation about HCL-Foxconn OSAT project

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

Although India approved three chip projects under its flagship incentive policy, the Indian government reportedly has some reservations about the packaging and testing facility project proposed by HCL and Foxconn.

The Economic Times quoted unnamed Indian government officials saying that HCL and Foxconn, which formed a joint venture in January, proposed to invest US$100-150 million to set up an OSAT facility in India under India's INR760 billion semiconductor and display fab incentive scheme, with Foxconn holding 40% of the joint venture.

However, sources told the Economic Times that the Indian government asked the duo to include more information in their proposal, such as the technology on which the facility will function, the technology partner, and the type of technology transfer agreement between the partners. The report quoted a government official saying that the three projects approved by the government had these details.

The Indian government previously approved three projects, including a wafer fab proposed by Tata and built by PSMC, and two ATMP/OSAT facilities to be operated by Tata and CG Power, respectively. India's Prime Minister Narendra Modi laid the foundation stone for the three projects in mid-March.

Foxconn earlier set up a joint venture with Vedanta, proposing to establish a wafer fab producing chips on 28nm process node. Before the joint venture fell apart, the Indian government also required them to find a technology partner and asked them to submit more information regarding the feasibility of their project. Besides the project proposed by HCL and Foxconn, Israel-based Tower Semiconductor's proposal has yet to obtain clearance due to legal issues between Tower Semiconductor and its former joint venture partner.

India is ambitious about being in the ranks of global chipmaking hubs. Ashwini Vaishnaw, minister of Electronics and IT of India, expected the first made-in-India chip to be produced by the end of 2024 and foresaw five more fabs to come in the next five years.

In an interview, Vaishnaw told the Economic Times that India would be among the top five chipmaking hubs, along with Taiwan, South Korea, the US, and China.