India sets up panel to identify semiconductor fab technology, investors

[Dark Sorrow]

The government today announced the setting up of an empowered committee for identifying technology and investors for setting up two semiconductor wafer fabrication ( Fab) facilities in the country . The empowered committee has adviser to prime minister on public information, infrastructure and innovation , chairman of National Manufacturing Competitiveness Council ( NMCC ) , secretary to the department of expenditure and member ( industry ) of the Planning Commission as members , while M J Zarabi , former CMD of Semiconductor Complex Ltd ( SCL ) is the technical expert and secretary, DIT its member convener. The empowered committee may co-opt any other experts . The rough order of magnitude ( ROM ) of investment for the two wafer fabs - Fab -1 and Fab -2 - is estimated to be around Rs25 , 000 crore ( $ 5 billion ) . The exact level of government support for the will be finalised after negotiations . The semiconductor wafer fabs will have a catalytic impact on development of downstream and upstream products, including ancillaries. It would have sizable impact on the development of IT /ITeS sector, particularly in very large scale integration ( VLSI ) design software, solutions and services . It will also boost innovation and R &D, especially in the area of semiconductors and related areas . It will help generate employment of the order of about 30 million ( direct and indirect ) by 2020 across various levels of competencies. The empowered committee will identify technology and potential investors for establishment of semiconductor wafer fabs , and thereafter ascertain their interest in setting up of semiconductor fab facilities in the country . The committee will assess and recommend the nature and quantum of government support such as equity / grant / subsidy in physical/ financial terms that may be required. The empowered committee will submit its recommendations to the government by 31 July 2011 . The empowered committee on Fab has been set up following recommendations by a previous committee that suggested the setting up of semiconductor wafer fab facility in the country . The committee had recommended preferential access to India -made electronic goods for all government procurements and procurement by government licensees, besides setting up of an ` Electronic Development Fund' , as also a ` National Electronics Mission ' and support to manufacture of specific high priority electronic product lines in India by providing capital grant and creation of electronic manufacturing clusters. The recommendations of the committee have been examined in detail in a series of inter-ministerial meetings and appropriate proposals are being evolved for approval of the competent authority on each of these recommendations . Electronics hardware sector is capital intensive and is facing several disabilities and barriers Therefore , the proposal will have significant impact in resolving these issues and help Indian electronics hardware industry to develop localised content / value addition.

 

[mattster]

5 years ago there was a lot of chatter about building fabs. Plans were drawn up and Semindia and HSMC was formed and a lot of reports of technical collaboration, etc.
and in the end.....nothing happened. It was all just talk and India's prestige also sunk.

Unless GOI sticks a huge percentage of the initial investment, nothing will come out of it. China's fabs are still losing money but the Chinese government is willing to pour money into it because they see it as a strategic industry both in military terms and the spin-off effect on other industries.

Here is the EETimes article:



India's latest fab push pegged at $5 billion
Kariyatil Krishnadas , Peter Clarke

4/21/2011 12:22 PM EDT


BANGALORE, India -- With its semiconductor manufacturing initiative dead in the water, India has embarked on a new plan designed to build at least two domestic wafers fabs.

The government has proposed the establishment of a committee to identify technologies and investors to lead the effort. Among others, the committee would include an adviser to the prime minister on technology issues, the chairman of the National Manufacturing Competitiveness Council and M.J. Zarabi, former chairman of India's Semiconductor Complex.

Along with identifying technologies and potential investors, the committee will recommend the level of government support for the fab project and the mix of grants and subsidies. The panel's recommedations are scheduled to be delivered by July 31.

Key goals of the fab effort include developing policies for encouraging access to Indian-made electronic products along with the creation of an Electronic Development Fund. The fund would provide grant money to build electronic manufacturing clusters.

The government said the fab initiative also will seek to develop "localized content [and] value addition."

Construction of the two fabs is expected to cost about $5 billion. The amount of government financial support must still be negotiated.

"The wafer fabs will have catalytic impact on development of downstream and upstream products," according to a government statement. "It would have sizable impact on the development of VLSI design software, solutions and services. It will also bootstrap innovation and R&D."

The fab initiative is the latest in a series of efforts designed to build up an Indian electronic hardware industry. Previous efforts have failed to produce tangible results, partly as a result of an ongoing debate here over whether India needs a domestic chip industry.

Earlier government proposals to provide financial incentives to build wafer fabs have languished. It remains to be seen whether the latest effort will fare any better.

The Indian government estimates that the creation of a chipmaking industry within India will help create 30 million direct and indirect jobs by 2020.

However, India has been here before and failed to attract any chip manufacturers to set up shop. In the middle part of the last decade a group of Silicon Valley based Indian ex-patriates created Semindia before transforming that company into a supplier of communications equipment. Hindustan Semiconductor Manufacturing Corp. selected Infineon Technologies AG as a partner to help it put down two fabs in Fab City industrial park near Hyderabad in the state of Andhra Pradesh.

Neither SemIndia nor HSMC has put down wafer fabs and the government-backed Fab City has drifted towards a focus on solar energy. It was not discussed whether Fab City would still be a preferred location for the creation of chip manufacturing under the renewed plan.

 

[prahladh]

many companies are going fab-lite. If we can enter the market in time, may be we can tap into some of these.

 

[anoop_mig25]

too little tooooooooooooooooo late and as usual just talks some committee formed to look in matter but nothing concrete in this matter

 

[nitesh]

same news as above, close to 5 billion USD:

http://articles.economictimes.india...ring-units-fabrication-information-technology
Government planning to set Rs 25,000 crore chip-manufacturing units fearing rogue programs in imported chips

"Plans include setting up a semiconductor unit (Fab-1) with established technology to support fabrication of chips to meet the requirement of high volume products as well as the requirement of the fab-less design companies on pay-per-use basis. This activity may involve either setting up a plant in India with established technology or acquiring an existing fabrication abroad and its eventual relocation to India. The government support needed for either of the options will be negotiated," a department of information technology statement said on Wednesday.

Fab-2 - the second phase of the project -- will entail a greenfield state-of-the-art semiconductor fabrication unit. This would imply giving equity or grant to an established integrated device manufacturer to set up the unit in India. The amount of equity or grant will also be negotiated with the government, the note said.

The committee also recommended introduction of policies for preferential access to "manufactured-in-india" or "Indian products" electronics goods for all government procurements and procurement by government licensees, creation of a dedicated "electronic development fund"; a National Electronics Mission, manufacture of high-priority electronic product line in India through capital grant and creation of electronic manufacturing clusters.

India is already a hub for semiconductor design with nearly 2,000 chips being designed every year and more than 20, 000 engineers engaged in chip design and verification -- mostly at the research centres of global semiconductor firms.

Annually, India generates nearly $2 billion in revenues for the chip design services. The semiconductor manufacturing companies abroad are generating revenues to the tune of $ 15 billion from wafer manufacturing based on these designs.

 

[nitesh]

'Many players will compete for semiconductor facility'

He also said the foundry facility at Chandigarh, which has been upgraded to 180 nano meter resolution, would commence full production by 2012-13 and the chips produced here would be able to meet some of the requirements of the defence establishment.

 

[Abhijeet Dey]

Re: India sets up panel to identify semiconductor fab technology, inve

Indian Govt Approves Proposal For Setting Up Two Semiconductor Fab Units

LINK: efytimes.com/e1/fullnews.asp?edid=115854

Friday, September 13, 2013: The Government of India has given a nod to the proposal for setting up of two semiconductor manufacturing units in the country. This will help in reducing the import of electronics products in the country. Reliable sources from Department of Electronics and Information Technology have confirmed the news saying that the cabinet has approved the proposal of the Telecom Ministry for setting up two semiconductor wafer fabrication manufacturing facilities in India.

Commenting on the decision, Dr Ajay Kumar, joint secretary, DeitY, said, "This is a historic decision and will change the landscape of electronics in the country."

It is worth mentioning here that some of the world's leading economies including the USA, France, Germany, Ireland, Japan, Singapore, Taiwan and China besides a number of developing economies like Malaysia and Israel have their own fabs. These fabs continue to contribute significantly to the growth and development of the economy of their respective countries and it is hoped that this would be the case in India as well. As of now, India has no choice but to depend on the imports of electronics products, mainly chips. But these fabs will be helpful in checking the imports of electronics, which may exceed oil imports by 2018.

Setting up of these fabs will require an investment of around Rs 250,000 million. These fabs will boost R&D and innovation in the field of electronics, which will eventually help in generating 30 million jobs (both direct and indirect) in the country by 2020.

The Government of India had sent proposals to establish fabs in the country nearly two and a half years ago. An empowered committee received as many as 30 application, out of which two fab projects were short-listed. The committee includes Sam Pitroda, adviser to the Prime Minister, and V Krishnamurthy, chairman of the National Manufacturing Competitiveness Council, and few others. Jaypee Group is spearheading one of the two project consortium. It has IBM as its technology partner, whereas the other project is led by Hindustan Semiconductor Manufacturing Corporation. Its technology partner is Geneva-based STMicroelectronics.

Welcoming the decision, the India Electronics & Semiconductor Association (IESA) lauded the Government of India's notification of the Semiconductor Wafer Fab (fab). The IESA deems the fab a highly strategic game changer for India, welcoming the fructification of the proposal. The IESA looks at the fab as India building strategic technology capability which will leapfrog the country ahead by several years, in development of indigenous electronic products and tremendously aid in the development of a local fabless semiconductor industry. IESA also believes that the presence of a local fab in India would boost the country's capability to build IP assets within India. We reiterate that in terms of its impact and implications, the fab must be treated on par with India's investments in its space and nuclear programmes.

The commencement of building the fab comes at a time when the Indian economy is at a point of inflection. It will arrest project costs from further escalation and will give the Indian ESDM ecosystem a boost to take their place as a leader in the global economy.

India, today consumes close to US$ 7 billion of semiconductor products every year. By 2020, when the total ESDM market is expected to reach US$ 400 billion, this consumption is expected to rise to touch US$ 55 billion. With the location of a fab in India, the country could achieve a degree of self-sufficiency in electronics, and partially reduce the very high supply chain risks that India is exposed to, without an alternate source for procurement.
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Even a small country such as Ireland & Taiwan have semiconductor fabrication plants. The question is why the hell Indian Government took so much time to decide on setting up a semiconductor fab in India? Was there some pressure from other advanced foreign countries?

 

[warriorextreme]

Re: India sets up panel to identify semiconductor fab technology, inve

As per the latest news GMR is also in race now along with HSMC and Jaypee.

GMR in race to set up semiconductor unit

Infrastructure behemoth GMR Group has shown interest in setting up a semiconductor fabrication unit (fab) — a complex technology project costing about Rs 25,000 crore, out of which 40 per cent is sponsored by the Centre. According to two officials aware of the matter, GMR has approached the Department of Electronics and Information Technology (DEIT) and is currently looking to partner technology companies interested in the project.

GMR's entry into the race could queer the pitch for its corporate rival Jaypee Associates and home-grown chip firm Hindustan Semiconductor Manufacturing Corporation (HSMC), which have been in the fray to set up fab units since 2011. Jaypee and HSMC were given the 'in-principle' approval by the Cabinet in September this year to build two fab units in the country, costing upwards of Rs 50,000 crore.

The Cabinet had asked DEIT to open the floor for other venders as well, to apply for the sops before coming back for a final approval. The extended deadline comes to an end on the 25th of this month.

There is a possibility that the government does an evaluation of all the projects (together with the existing ones) to arrive at the most cost-effective proposal. According to government official, if there is another proposition for the project, it will surely be considered. "It will be on the Cabinet or the advice of the committee to decide what to do then (with the existing proposals)." The official added it is unlikely the Cabinet will approve "three or four fab proposals" and the idea in the beginning was just to subsidise one project but was later extended to two.

"They (GMR) have sounded out many global technology companies," said one of the officials in the know of the matter. However, if the company has been successful in sealing a partnership deal is not known, he added.

Another official said the company is yet to present the formal proposal to the department. "It seems they (GMR) are reaching out to technology partners for this." None of the officials wanted to be named because of the sensitivity of the matter.

The fab unit produces the most complex and valuable part of any electronic device – the chip. India has been trying hard for several years to set up fabs in the country, which are believed to act as a catalyst for spawning a domestic electronics manufacturing industry.

"The GMR Group is in possession of land at Kakinada in East Godavari district, Andhra Pradesh, where it intends to set up an industrial park as a developer, with a complete social eco-system", said a GMR spokesperson. "It will be inappropriate to comment on specific business development plans, at this early stage, as it is market-sensitive and at a conceptual stage," the company said in its emailed response to Business Standard.

The "in-principle" approval was given to Jaypee and HSMC to avoid any post facto criticism of the procedure followed to incentivise them. The empowered committee will analyse the new proposals, which will again go back to the Cabinet for a final go-ahead. Meanwhile, GMR's entry into the race could further delay the project approval, which has been in the pipeline for over two years. Even with the current time-line, the facilities are expected to produce production only by 2017.

Under the current proposals, Jaypee has tied up with IBM and Tower Jazz and has proposed a facility in Greater Noida with an investment of Rs 26,300 crore, while HSMC has partnered ST Microelectronics and Silterra and has planned its unit at Prantij near Gandhinagar in Gujarat with an investment of Rs 25,250 crore.

Both Jaypee and HSMC declined to comment.

The second official quoted above said infrastructure companies such as Jaypee and GMR have evinced interest in the fab projects as these firms have land, special economic zones and might be looking for good developmental projects.

BUZZING CIRCUIT

DEALS SO FAR

WHO

Jaiprakash Associates along with IBM and Tower Jazz
Investment: Rs 26,300 crore
Proposed location: Greater Noida

Hindustan Semiconductor Manufacturing Corporation (HSMC) along with ST Microelectronics and Silterra
Investment: Rs 25,250 crore
Proposed location: Prantij, near Gandhinagar, Gujarat

ROAD AHEAD

* Cabinet to give final approval after November 25

* Existing players expect all government approvals, including environmental, to come by end of 2014

* Facilities will take around 30-35 months to be operational and will start producing chips only around 2017

 

[Abhijeet Dey]

Re: India sets up panel to identify semiconductor fab technology, inve

BUZZING CIRCUIT

DEALS SO FAR

WHO

Jaiprakash Associates along with IBM and Tower Jazz
Investment: Rs 26,300 crore
Proposed location: Greater Noida

Hindustan Semiconductor Manufacturing Corporation (HSMC) along with ST Microelectronics and Silterra
Investment: Rs 25,250 crore
Proposed location: Prantij, near Gandhinagar, Gujarat

ROAD AHEAD

* Cabinet to give final approval after November 25

* Existing players expect all government approvals, including environmental, to come by end of 2014

* Facilities will take around 30-35 months to be operational and will start producing chips only around 2017

Very interesting though 2017 is very late given the complex technologies for setting up a fabrication hub for Semiconductor Chips. I hope the Cabinet does not delay this any longer. Will this be enough to stop huge imports from China?

 

[cobra commando]

Re: India sets up panel to identify semiconductor fab technology, inve

IT Minister Unveil Test Lab for Silicon Chips in Bengaluru - The New Indian Express