Global chipmaker Intel has no plans to set up semiconductor manufacturing facilities in India anytime soon, but it’s an evolving plan, a senior company executive said. This comes at a time when the Indian government is actively working to build a semiconductor manufacturing ecosystem in the country with a $10 billion capex-linked scheme, and is hoping to attract global players like Intel, Taiwan Semiconductor Manufacturing Company (TSMC), and Samsung to join in.
Speaking to Moneycontrol on the sidelines of the Intel Tech Tour in Penang, Malaysia, which has one of its largest hubs for chipset manufacturing and assembling, Steve Long, General Manager for Asia Pacific and Japan at Intel, said, “I would never tell you that I am not looking at setting up semiconductor manufacturing in India. Never say never. But there are no plans to set up semiconductor manufacturing in India at the moment, it is evolving.”
“What you saw and experienced in Malaysia happened over 50 years and not overnight. We are eagerly and actively talking to multiple players in the India ecosystem to help them enter manufacturing whether it is enabling the ecosystem so that they can build and assemble locally and move up the manufacturing value chain,” Long added.
Intel also offers foundry and fab services to manufacture chipsets for third-party customers, even for rivals' designs.
In 2022, Intel CEO Pat Gelsinger said during his India visit that the company was not yet ready to invest in semiconductor manufacturing in India.
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Later in March 2023, Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology, said that the government was in active talks with the world's top semiconductor manufacturers, including TSMC, Intel, and Samsung, to set up manufacturing in India. He tweeted that India would enter manufacturing in 2023 regardless of whether these players came in, but that they may eventually come around.
Interestingly, Long's comments come less than a week after Intel's $5.4 billion acquisition of Tower Semiconductor was called off due to delays in obtaining regulatory approval from Chinese regulators. Intel did not seek an extension to close the deal, and as a result, it paid a $353 million breakup fee.
Tower Semiconductor is a part of the International Semiconductor Consortium (ISMC), which had planned to invest $3 billion to set up semiconductor manufacturing facilities in India under the government's incentive scheme. Although Intel had denied entering India for chipset manufacturing until now, if the Tower Semiconductor acquisition had gone through, it would have become an indirect participant in the plan.
Responding to this, Long said, “Our dealings with Tower don't exist now. Any kind of synergies or investments we might have made would have been speculative until the deal closed anyway.”
According to Long, while Intel’s foundry strategy was not dependent on Tower, it would have gotten enhanced had the deal closed with the regulators.
“We had 18 months to close the deal but we didn’t get regulatory approvals to close, so we decided to pay a fee instead and exit the deal,” he said.
He added, “In these 18 months through the deal, we learned a lot. We onboarded customers, drove standards we spoke about. We learned on how our businesses need to evolve --- looking at partnerships, joint ventures and acquisitions etc.”
Overall, Long remained bullish on the India opportunity in the Asia Pacific and Japan (APJ) region, highlighting the country's domestic consumption potential and its position as the fastest-growing market in the region.
(The correspondent is in Penang on an invitation from Intel.)
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