India is keen to revive the application process for $10 Billion in incentives and assistance intended to encourage local chipmaking. The government wants to renew efforts to lure prospective chipmakers to India.
To make the process easier, New Delhi has eliminated the 45-day requirement for submission. Initially, the government had given companies a 45-day window, beginning January 1, 2022, to apply for financial support. This was part of the Narendra Modi-led government’s to boost the domestic chip industry. But this didn’t attract many companies. As such, the centre will allow companies to apply again and will accept applications until its budgeted $10 Billion in incentives runs out. This will prompt a race for government-given incentives.
Vedanta and Foxconn signed a pact in September 2022 with the state of Gujarat to invest $19.5 Billion to set up semiconductor and display production plants. However, neither companies have significant experience in manufacturing chips and Vedanta is also reeling under a heavy debt burden. Sources say that for any chip project, companies have to make detailed disclosures, including whether it has firm, binding agreements with a technology partner for production. It also has to reveal financing plans, including equity and debt arrangements.
Moreover, the applicants have to disclose the type of semiconductors they will make and their target customers. The company, to qualify for 50 per cent support from the state, needs to make chips using the relatively sophisticated 28-nanometer or more advanced technology.
David Reed, the CEO of Vedanta’s semiconductor business, said the project is on track with the venture breaking ground on a site in the fourth quarter of this year and earning revenue in the first half of 2027. He outlined that Foxconn has secured production-grade, high-volume 40-nanometer technology for the venture as well as development-grade 28-nanometer technology without disclosing where the tech is coming from. Reed said the two companies are following the application process issued by the Indian government with confidence and partnership. Vedanta and Foxconn have supplied all relevant information and are eagerly awaiting final approval.