India's core manufacturing plan has been frustrated, and the "tens of billions of subsidies" cannot be spent
Latest update time：2023-06-03
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In order to expand local chip manufacturing, India has launched a "tens of billions of dollars in subsidies" project, but it is now close to stagnant.
India's Ministry of Electronics and Communications Technology announced on Wednesday that the country will restart applications for chip manufacturing incentives. Compared with the last application window of only 45 days, this time eligible companies will be able to apply before the end of next year. India's Minister of State for Electronics and Information Technology Rajiv Chandrasekhar said on social media that some existing candidate companies are expected to submit applications again, and some new candidates will also join them.
In the minister's comment area, the top comments all pointed out one problem: India wasted a full year and a half on developing its local semiconductor industry.
According to a Reuters report on May 31, three sources said that a consortium's plan to spend $3 billion to build semiconductor facilities in India has stalled because of the Israeli chip manufacturer Tal Semiconductor, which was listed as a technology partner by the consortium. The company is being acquired by Intel Corporation. The stagnation has dashed India's chip manufacturing plans.
Another person with direct knowledge of the matter said that a second $19.5 billion plan to make chips locally - a joint venture between India's Vedanta and Foxconn - is also progressing slowly. Because their negotiations to persuade European chipmaker STMicroelectronics to join have stalled.
The challenges faced by these companies have severely frustrated Prime Minister Narendra Modi. Modi has made chip manufacturing a top priority and hopes to "open a new era of electronic manufacturing" by attracting global companies.
The Indian government opened the window for "tens of billions of subsidies" in January 2022 and only gave manufacturers 45 days to apply, which is enough to show the confidence of policymakers. In the end, a total of three groups of companies submitted subsidy applications for building Indian chip factories, namely the international chip consortium ISMC, the Foxconn-Vedanta joint venture, and the Singaporean technology company IGSS. To date, all applications are far from being implemented, and the core issue focuses on the requirements of technical partners.
According to multiple people familiar with the matter, ISMC, a joint venture between a Middle East consortium and Israeli Tower Semiconductor, lists Tower Semiconductor as a technology partner. However, due to the subsequent acquisition of Tower Semiconductor by Intel, the investment and construction of factories in India was put on hold.
Foxconn has similar problems with the Indian mining company Vedanta's application. They originally hoped to meet the subsidy requirements through STMicroelectronics' technology licensing, but the Indian government hopes that STMicroelectronics can participate more deeply in the project, such as holding shares in Indian factories. According to people familiar with the matter, STMicroelectronics has no interest in this, which has also left the negotiations in a pending state.
From the perspective of STMicroelectronics, the Indian government's proposal makes no sense. The European semiconductor giant hopes that India will first become a mature market (before considering investment).
Talking about India's semiconductor ambitions, India's Minister of State for Electronics and Information Technology Rajiv Chandrasekhar said in an interview with a Reuters reporter on May 19 that ISMC was "unable to move forward" due to Intel's acquisition of Thar, while IGSS " Hope to resubmit (application)”.
"Both companies had to exit," he said, without elaborating.
According to the report, two of the aforementioned sources said that Thar may re-evaluate the possibility of participating in the aforementioned joint venture project based on the outcome of negotiations with Intel Corporation. ISMC's partner, Next Orbit Investments, did not respond to a request for comment, while Tal declined to comment. Intel Corp. also declined to comment. IGSS did not respond, nor did India's information technology department. STMicroelectronics Ltd. also declined to comment. David Reed, CEO of the Vedanta-Foxconn joint venture, said in a statement that they had an agreement with a technology partner to transfer technology, but declined to comment further.
Source: Comprehensive reference news, financial news agency and other online content
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