Govt to complete evaluation, ink pacts with cos in 8-10 months

The government will undertake a detailed evaluation of applications it has received in response to the mega semiconductor scheme and expects to complete the entire process and sign agreements with companies in next 8-10 months, according to Union Minister for Electronics and IT Ashwini Vaishnaw.

Vaishnaw said he is happy with the response that came in within a short period of time, when the ministry invited applications under the Rs 76,000 crore semiconductor programme.

The government is confident of seeing one of the big global players in semiconductor industry coming in the next round, Vaishnaw told PTI in an interview.

He asserted that many other players too are “seriously evaluating” India’s semiconductor programme, and that the ministry is in discussions with several companies.

Eight locations have been shortlisted already, and it is for the investors to take a final call, he said.

“About eight locations are shortlisted already. And of course, the investor has to take the final decision. So getting the entire supply chain in place, the chemicals, all that stuff, clean water, and everything else… we are focusing purely on execution,” he explained.

Asked why the likes of Intel, Samsung, and other global chip giants did not put in an application in the first round, the minister observed that many companies already have investments ongoing, and given that their investment cycles are currently on, they may require more time to evaluate the new scheme thoroughly.

“These companies have lots of investments already going on. So they would definitely like to evaluate our program in bigger detail and may like to take more time,” he said.

Many of the well known names in the semiconductor space are seriously evaluating India’s semiconductor scheme, he said, adding, “I hope we will get one of them in the next round. In fact, I am actually sure.” Vaishnaw did not divulge further details.

Such companies can approach even now but they will be considered in the next round, which will follow once evaluation for the first round of applicants concludes, he said.

The semiconductor scheme is “good” and doesn’t require any further tweaks, he said, adding that the focus is now on execution for the applications received, and on building the talent pipeline.

“These are very complex projects. Evaluation has to be done in a very transparent manner. And very detailed evaluation has to be done. So we are focusing on that. We have kept a target of 8-10 months for closing everything,” the minister said.

It is pertinent to mention here that the government has received five applications for semiconductor and display fabs with total investment to the tune of Rs 1,53,750 crore (USD 20.5 billion).

Three companies — Vedanta in joint venture with Foxconn; IGSS Ventures and ISMC — have submitted applications for semiconductor fabs.

The applications have been received for setting up 28-65 nanometer (nm) semiconductor fabs with capacity of about 1,20,000 wafers per month and the projected investment is USD 13.6 billion wherein fiscal support from the central government is being sought for nearly USD 5.6 billion.

Two companies — Vedanta and Elest — have proposed to set up display fabs with projected investment of USD 6.7 billion. They have sought support of USD 2.7 billion from the Centre under the scheme for setting up of display fabs in India.

The first round of application window for establishment of semiconductor and display fabs closed last week.

Vaishnaw said technical and financial experts will be involved in the evaluation of applications, given the complex nature of proposals.

“These are comprehensive proposals, we have to look at how it matches within our scheme framework. And then after all the approvals, and stakeholders have been consulted, we take it back to the Cabinet for approval. So I think it is 8-10 months journey, but we are working very aggressively on that and hopefully we should be able to do it faster,” Vaishnaw said.

That timeline would also see agreements being signed with players, he said.

While the global timelines for factories to come up tends to be about three years from signing of an agreement, the government hopes to shorten this duration.

“A very aggressive timeframe would be 2-2.5 years (from date of signing of an agreement), for factories to set up and start production,” he said.

The IT Ministry wrote to all the states, and received “very good response” from Uttar Pradesh, Gujarat, Karnataka, Telangana, Odisha, and Tamil Nadu, and expects more states to join the fray.

“Basic infrastructure should be available. That’s a precondition. So water supply, electricity with double redundancy for getting very reliable source of power, plus no vibrations in the ground…,” he elaborated.

In all, about eight states have written with specific proposals and investors need to select final location, he pointed out.

It may be recalled that besides electronic chip and display plants, four companies — SPEL Semiconductor, HCL, Syrma Technology and Valenkani Electronics — have registered for semiconductor packaging scheme. Ruttonsha International Rectifier has registered for compound semiconductors. PTI