India Next in Line With Incentives for Chip Makers

Over the past couple of months there have been a lot of calls for more investment into the semiconductor industry due to the current shortage of many different kinds of semiconductors. As we’ve seen, several government organizations have already started working on how to woo chip makers to their part of the world and the latest nation to join the fray is India.

Unlike the US and the EU where so far no firm budgets have been approved, India has already approved a US$10 billion incentive plan for semiconductor, as well as display panel manufacturers who are willing to consider India as the next location for their new fabs. According to Reuters, the Indian government is said to cover up to 50 percent of the project cost of new semiconductor and display panel fabs. So far it seems like at least three companies are interested in the scheme for semiconductor manufacturing, namely Tower Semiconductor out of Israel, Foxconn and an unnamed Singaporean consortium.

The Indian government is hoping that the investments will create some 35,000 direct jobs for highly qualified staff, plus up to another 100,000 indirect jobs. India is lagging behind when it comes to the semiconductor industry, despite there being a growing local semiconductor designs, most of them can’t be produced locally due to lack of suitable foundry partners. It’s unlikely that we’ll see a huge shift here, unless there’s local interest in starting a foundry that manufactures for Indian companies in India. That said, if India can manage to win over some foreign companies that will set up foundries locally, this is a means to further local know-how in semiconductor manufacturing, which could lead to local foundries in the future, even though it might not happen in the near future.