Tower Semiconductor dials Modi seeking help to fast-track India chip policy

Tower Semiconductor India
Manufacturing of microchips. Image by czdistagon | Bigstockphoto

Israeli company Tower Semiconductor has sought Indian Prime Minister Narendra Modi’s intervention in fast-tracking his government proposal for semiconductor manufacturing in the country.

The Ministry of Electronics and IT had floated an Expression of Interest (EoI) seeing interest from chipmakers in January this year but hasn’t provided any update since then to interested companies.

Tower Semiconductor, which is the technology partner of a consortium floated by Abu Dhabi-based Next Orbit Ventures, informed Modi that any delay from the Indian government’s side would mean it will be unable to stay active in the project in the near future.

The company had pitched for a $3 billion analogue 65-nanometre semiconductor fabrication unit in Dholera, an industrial hub in Gujarat, which is the home state of Modi.

“We are disappointed and demoralized that despite the highest G2G level discussion for the proposed semiconductor fab,” the company said in a letter, which was also marked to India’s finance, commerce and industry, and IT ministers.

“…there is no clue where we are heading…there have been no clear timelines, nor commitment or transparency from the government. We would request you to kindly explicitly articulate and convey the limitations of GoI (Government of India) and its stakeholder without further delay; else, we express our inability to stay active in the project in near future,” the company added in its letter.

“Israel, as an India strategic partner in many areas, would wish to participate in the project to enable India its Digital Safe India dream considering the latest development in its neighbourhood,” the company further added.

After the strongly worded letter, India’s IT ministry Ashwani Vaishnaw, who recently took charge from Ravi Shankar Prasad, spoke with the consortium to assure support, according to a report by the Economic Times.

India’s IT ministry, also known as MeitY, had reportedly received applications from 20 top companies earlier this year after it floated the expression of interest (EoI) to gauge the interest.

As per the report, large semiconductor players have urged the Indian government to act fast on its local manufacturing plans at a time when the US and Europe are looking to attract them through subsidies. This comes at a time when industries like automobiles and handsets are struggling because of chip supply shortages.

The Indian government plans to offer $1 billion in incentives to attract global companies to set up fab units in the country. It is in the process of rolling out requests for detailed proposals, after which it will decide the quantum of the subsidy, the report added.

The Indian government had previously said that setting up semiconductor plants is critical since India wants to increase its share in the global manufacturing of mobile phones, IT hardware, automotive electronics, industrial electronics, medical electronics, IoT and other devices shortly. India aspires to have $400 billion of electronics manufacturing by the year 2025.

The Indian government had in 2013 tried to attract semiconductor fab companies through various incentives but failed due to a non-existent electronics manufacturing ecosystem and relevant policies.

India recently started tracking chip and processor imports to the country by making import registration mandatory for chipmakers. Experts said that the move aligns with the Indian government’s ongoing assessment of the viability of setting up semiconductor fab in the country.

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