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
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.
Related links and articles:
Tower in talks with SemIndia, HSMC
SemIndia looks beyond silicon and beyond India
Report: Fab delay forces SemIndia to make routers
Infineon backing of HSMC set to include equity investment