Down But Not Out: On the Indian Government’s Semiconductor Fab Ambition
India has a lot of talent to design chips but not make semiconductor materials or fabricate chips.
The government heralded, in December 2021, its ambition of fabricating the most sophisticated sub-28 nanometre semiconductor chips in India, committing to subsidize 50 percent of its project cost of fab projects besides providing a host of other support measures. It received one application for fabricating 28-nanometre chips from Vedanta-Foxconn JV. Unfortunately, it did not make any real progress. Foxconn terminated the JV in July 2023.
The government has since lowered its ambition. In October 2022, the government promised a 50 percent incentive for almost all types of semiconductor fabs – 28 nm or larger. American semiconductor major Micron Technology Inc. announced, on 22 June 2023, its plans to build a new semiconductor assembly and test facility (not a chips fabrication facility though). The Union Cabinet approved fiscal support of Rs 11,000 crore for this proposed facility.
