Aiyar, in his column, notes that if a single project like Vedanta-Foxconn costs $20 billion, he threatens to swallow the entire $10 billion government allocation. “And the four or five other fabs that will follow? If everyone gets a similar grant, where will the money come from?” he asks.
Industry watchers say the scheme offers financial support to companies that want to manufacture a range of semiconductor products in India. This will reduce the production costs of companies manufacturing these goods and thus encourage them to set up new factories and other facilities.
“This can be seen as an effort to establish a strong semiconductor industry that would remove the country’s dependence on imports. But then India’s attempts to attract chipmakers in 2017 and 2020 also failed to bear fruit. Intel, Samsung, TSMC have not yet revealed their interest,” said one of these observers.
The government has revealed that companies like Vedanta-Foxconn that have chosen Gujarat over Maharashtra will produce goods using methods ranging from 28nm to 65nm, with a combined monthly output of 120,000 wafers.
In a report, The register, a global online enterprise technology news publication, said that top players like Intel, Samsung and TSMC are manufacturing their most advanced products at 10nm or less, while global wafer capacity 200 mm semiconductors currently exceeds 6.6 million per month. “Even if all India’s investment is cancelled, it will add around 2% to current global capacity – a decent entry into the global market from a standing start. But the 28nm kit that India hopes to manufacture is one of the few markets that currently has no shortage of product. And 120,000 wafers per month isn’t a big addition to supply by today’s standards: Intel already has over a million wafers per month of new capacity either under construction or on the drawing board. Samsung, TSMC and others also revealed plans to add capacity. By the time India’s efforts come online, they may be smaller,” he said.
Semiconductor industry veteran Arun Mampazhy said, “While in a nutshell, this is good news for real contenders like 65nm versus 28nm wafer capacitance manufacturers, I’m also a bit concerned about dilution for even older nodes like those with 250nm wafer capacity. In addition, it will now be a challenge for the Ministry of Electronics and Information Technology to assess the authenticity of applicants, especially in the field of packaging.