Semiconductor manufacturing in India gets a boost with ISMC’s proposed $3 billion plant in Karnataka

• India set out a $10 billion push to bring semiconductor chipset manufacturing in the country back in 2021.
  
• Now, it seems that the government’s plans are coming to fruition with the first tangible multi-billion dollar investment announcement.
  
• Mining giant Vedanta has much bigger plans – at $20 billion – to set up a semiconductor and display manufacturing facility in the country.
  

ISMC, a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor, has announced that it has signed a memorandum of understanding (MoU) with the Karnataka government to set up a semiconductor chip manufacturing plant.

According to a statement by the Karnataka state government, ISMC will invest up to $3 billion in the state for its chip manufacturing facility.

Intel, the company which powers most of the computers in the world, has announced plans to acquire Tower Semiconductor, one of the partners of the ISMC joint venture.

India’s semiconductor plans get a big, needed boost

India has been stressing the need for diversifying its supply chain when it comes to semiconductor chips, announcing a massive $10 billion (approx. ₹76,000 crore) plan to attract chipmakers from around the world to set up shop in India.

Now, it looks like those plans are coming to fruition with ISMC’s $3 billion announcement.

Earlier, India was said to be in talks with semiconductor giants like TSMC, Intel and GlobalFoundries to set up shop in India.

Vedanta in ‘advanced talks’ with three major Indian states

Indian multinational mining giant Vedanta could also be looking at diversifying its business by jumping onto the semiconductor manufacturing bandwagon.

According to a Reuters report, the Mumbai-based company headed by founder Anil Agarwal is looking at three major Indian states – Gujarat, Maharashtra and Telangana, to set up a semiconductor chip manufacturing plant.

The report further adds that Vedanta has planned an investment outlay of $20 billion for its semiconductor and display manufacturing plans. This is double that of the Indian government’s PLI (production-linked incentive) scheme for chipmakers.

The Indian government has stated that the Indian semiconductor market is forecast to grow four-fold from $15 billion in 2020 to $63 billion in 2026.

With the ongoing global semiconductor chipset shortage and the increasingly volatile geopolitical scenario between the US and Taiwan, and China, on the other hand, the Indian government’s urgency to build up domestic semiconductor manufacturing capabilities is understandable.

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