Economic Survey 2023: Multiple players look to make India a semiconductor manufacturing hub

FM Nirmala Sitharaman tabled the Economic Survey 2023 in the Parliament on January 31.

President Droupadi Murmu in her speech for the opening day of the budget 2023 session on January 31 highlighted India’s manufacturing journey and said the country is now initiating efforts for manufacturing semiconductor chips locally.

The Economic Survey 2023 document tabled on January 31 also stated multiple players are looking to make India a manufacturing hub of semiconductors and have made the investment outlook in this sector positive. The survey report listed Israel-based International Semiconductor Consortium’s Memorandum of Understanding (MoU) to invest Rs 22,900 crore in Karnataka to set up India’s first chip-making plant. Vedanta and Tata Group are two domestic companies with interests in the semiconductor business.

“While these are early stages, global and domestic players have evinced interest based on the prospects for the semiconductor industry in India and the fiscal incentives provided,” the survey report said.

In September, Vedanta signed a Memorandum of Understanding (MoU) with the Gujarat government to set up a semiconductor unit in the state. Vedanta said it is setting up this plant in a joint venture (JV) with Taiwan-based Foxconn. Vedanta earlier said the company will hold 60 percent of the equity in the JV while Foxconn will own 40 percent. The project includes a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit and entails a total investment of Rs 1.54 trillion.