India Plans to Reopen Application Process for $10 Billion Chip Manufacturing Incentives

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India’s Minister of IT and Communications, Ashwini Vaishnaw, is currently on a three-day visit to the United States, where he has already met with Google CEO Sundar Pichai and is scheduled to hold discussions with leaders from prominent chip companies such as Intel, Micron, and Global Foundries.

The purpose of these meetings is to encourage these companies to invest in India’s burgeoning semiconductor industry.The Indian government had previously approved a $10 billion (Rs 76,000 Crore) incentive to establish a semiconductor ecosystem within the country. The initial application process for this incentive closed in February 2022, attracting three applications for chip manufacturing and two for display manufacturing.The chip manufacturing applications received included proposals from Vedanta in a joint venture with Foxconn, IGSS Ventures Pte (based in Singapore), and NextOrbit Ventures in partnership with Tower Semiconductor (an Israel-based company that Intel is set to acquire for $5.4 billion). These applications sought to establish semiconductor fabs with capacities ranging from 28 nm to 65 nm.While it remains unknown whether any of the initial applications have been approved, news has emerged that the Ministry plans to reopen the application process after 15 months.

Industry experts suggest that the approval of applications may depend on the proposed costs. Analysts also point out that allowing existing applicants to modify their submissions may pose a legal issue, as the scheme was initially closed to new applicants.Sources within the ministry have indicated that the government intends to learn from past experiences and keep the application process open-ended, rather than imposing a strict deadline. This approach aims to accommodate interesting companies that are ready to apply, ensuring a more comprehensive and competitive selection of potential chip manufacturers in India.

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