Semiconductor-related proposals by Tower, Tata and HCL-Foxconn likely before Cabinet today

Centre is likely to take up applications by semiconductor manufacturers for clearance, which include proposals by Israeli chip company Tower, Tata, and the HCL-Foxconn combine, according to CNBC-TV18.

Earlier today, The Economic Times had reported that the Cabinet is set to approve incentives for Israeli semiconductor company Tower's proposal to establish a chip fabrication unit on Thursday. This move is expected to pave the way for India's first pure-play chip foundry.

The estimated cost of Tower's project is between $9-10 billion, with the Centre subsidizing 50% of the cost under the Indian Semiconductor Mission (ISM). Furthermore, states will provide a further 15-25% subsidy, the ET report added.

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The government has received four proposals for setting up semiconductor manufacturing plants and 13 for chip assemblies units, Parliament was informed on February 7. The proposals are in addition to a Rs 22,516-crore chip assembly plant being set up by US-based memory chip maker Micron, Minister of State for Electronics and IT Rajeev Chandrasekhar said in a written reply in the Lok Sabha.

Earlier this month, Chandrasekhar also announced that India will soon have two semiconductor fabrication plants, along with several chip assembly and packaging units. Both projects have received multi-billion dollar investment proposals. One of the projects is an $8 billion proposal submitted by Israel-based Tower Semiconductors, while the other is from the Tata Group.

"I am happy to share this with you and you are probably the first one I'm sharing this with. In the near term, two full-blown fabs are going to come up in India. These are going to be multi-billion-dollar fabs in the 65, 40 and 28-nanometer technology and there will be a host of other packaging proposals that we are evaluating," Chandrasekhar said. He was responding to a question on the $ 8 billion investment proposal submitted by Tower Semiconductors and the status of India's semiconductor roadmap.

In an interview with PTI, the minister confirmed that the projects will be approved during the third term of Prime Minister Narendra Modi if they are not cleared before the upcoming general elections. He also mentioned that Tata announced other proposals in the fab. According to Chandrasekhar, these are credible and significant investment proposals, and the government expects to see this happening in the short term.

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According to government data, domestic electronics manufacturing increased over four-fold to Rs 8.22 lakh crore in the last 10 years. In FY 2013-14, electronics manufacturing was Rs 1,80,454 crore (USD 29.8 billion) and has grown significantly to Rs 8,22,350 crore (USD 102 billion) in FY 2022-23, which is further expected to grow up to Rs 23,95,195 crore (USD 300 billion) by 2026.