International Semiconductor Consortium (ISMC) has signed an MoU to set up India’s first semiconductor fab plant in Karnataka, investing $3 billion (around ₹22,940 crore). This marks a major achievement for the state at a point where various Indian states have been vying for a space in the semiconductor fabrication sector.
ISMC is a joint venture between Israel’s Tower Semiconductor and Abu Dhabi-based Next Orbit Ventures. Tower Semiconductor will soon be acquired by Intel, as the tech giant had recently announced plans for the same.
India’s First Chip-Making Plant
The Karnataka government announced that ISMC’s proposed 65-nanometer analog semiconductor fabrication unit will generate over 1,500 direct jobs and 10,000 indirect jobs over the next seven years. In order to build the plant, the chip makers’ consortium has requested for 150 acres of land in Mysuru’s Kochanahalli Industrial area.
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ISMC director Ajay Jalan and additional chief secretary for IT and bio-technology EV Ramana Reddy signed an MoU in the presence of Karnataka chief minister Basavaraj Bommai. Bommai stated, “This MoU is a significant amid the competition among various states to attract semiconductor fabrication units. Karnataka understands that it’s not just the fiscal incentives that matter but availability of conducive ecosystem and overall ease in operations are also important.” He added, “The Union government, under the able leadership of Prime Minister Narendra Modi, has launched the Semiconductor Mission and it has spurred Karnataka to lead the march in this sector.”
India’s Semiconductor Mission
India has been trying to woo major semiconductor firms to set up shop in the country, in a bid to bolster its position in the sector. As a step in this direction, the government has established a ₹76,000-crore production-linked incentive (PLI) scheme for large chip manufacturers.
Just recently, Union finance minister Nirmala Sitharaman visited the US and urged American semiconductor companies such as AMD, Western Digital, and Micron Tech to consider investing in India and enjoying the PLI incentives that accompany it. Besides ISMC, India’s Vedanta has also applied for India’s PLI.
It is reported that in February alone, five companies have applied to set up fab units, promising a total investment of ₹1.53 trillion. India’s semiconductor market is predicted to increase to $63 billion by 2026 from $15 billion in 2020.