A semiconductor unit in Karnataka will soon be a reality. The State government recently signed a Memorandum of Understanding (MoU) with the International Semiconductor Consortium ISMC to establish a 65nm Analog Semiconductor Fabrication plant in the state. The MoU was announced at the first SemiconIndia 2022 event in Bengaluru.
Semiconductor Unit In Karnataka – Investment
According to the MoU, ISMC will invest $3 billion or Rs 22,900 crores for the project. The state government will set aside 150 acres in Mysore’s Kochanahalli Industrial area to set up the fabrication unit. Once it is set up, this will be the first and largest fabrication unit in India as part of the Central Government’s Semiconductor Mission.
It is expected to have the capacity to generate over 1500 direct employment and 10,000 indirect employment opportunities. It will also fuel the development of an ancillary semiconductor ecosystem.
What Is The ISMC?
ISMC is a joint venture between Israel’s Tower Semiconductor and the UAE’s Next Orbit Ventures Fund (NOVF). Tower Semiconductor, will be the main technology partner for the project while the initial funding will be provided by NOVF.
Semiconductor Fabrication Proposals In Other States
With the global demand for semiconductors facing a shortage that is expected to continue through 2025 many states in India are working towards attracting semiconductor fabricators. India aims at becoming one of the largest suppliers for materials, equipment and services related to semiconductors.
A report by the Indian Electronics and Semiconductors Association (IESA) estimated that India will account for $100 billion out of a $600 billion global market. A majority of the top 25 semiconductor design companies have their R&D or design centers based in India.
The Vedanta Group had recently announced plans to invest about $20 billion to set up an electronic chip and display manufacturing units. Of this, $10 billion is budgeted for display manufacturing, $7 billion is set aside for semiconductors.
A further $3 billion may be added to the latter’s budget. The company is looking at locations in Himachal Pradesh, Maharashtra, Telangana, and Tamil Nadu for the project. Along with India, other countries like Japan and the USA are also working on proposals to encourage chip companies to establish fabrication units in their countries.
Intel is setting up a 1000-acre unit in Ohio with an investment cost of about $20 billion while Japan is holding talks with TSMC.