Hoping ISMC proposal gets approved under govt’s semiconductor scheme: Karnataka IT Minister

Karnataka government is confident that the International Semiconductor Consortium (ISMC) will be one of the approved applicants under the government’s scheme for semiconductors announced in December 2021. Dr Ashwath Narayan C.N., Minister for Electronics, IT & BT, Government of Karnataka, in an exclusive interview with Business Today said, “It is worth noting that only two companies will get the opportunity to avail benefits (as per the policy). We are hoping that Tower Semiconductor will be given that opportunity.”

ISMC is a proposal by Abu Dhabi-based NextOrbit Ventures in partnership with Tower Semiconductor (an Israel-based foundry of high-value analog semiconductor solutions, which Intel will be acquiring for $5.4 billion). ISMC was the first to have shortlisted Karnataka for setting up the semiconductor fab in India with a planned investment of Rs 23,000 crore. This project is expected to generate more than 1,500 direct and 10,000 indirect employment opportunities. For the same, a land parcel in Mysuru has been identified for the establishment of the semiconductor facility.

Karnataka has already made an agreement and issued a government order. Claiming that the state’s incentives are also as good as the government of India’s incentives, Dr Narayan C.N further added, “We (Karnataka) have tied up with the people who have the technical know-how. We can’t just tie up with the people who are not in that area. So very clearly, we have gone with the right partner who has domain expertise, who are into it and were manufacturing semiconductors.”

Arun Mampazhy, a semiconductor veteran and analyst had earlier told Business Today, “For silicon fabs, out of the current proposals received, from the information that is available in the public domain, ISMC's 65 nm (nanometre) looks most promising - technology wise as well as for its 50 per cent fab-fill offer from Tower Semiconductor. According to market studies, they have good resources to do feasibility of land and infrastructure offers from the state government. I believe they also have a consortium with defence PSUs and some reputed private industries as partners who could also be future customers. The government should fast-track ISMC proposal.”

Hoping that ISMC will be one of the approved applicants, Dr Narayan C.N., while sharing the timeline, stated the entire manufacturing process will take three to four years.

Other than the chip fabs, an increasing number of companies considering setting up assembly, testing, marking, and packaging (ATMP) plants in the country. US-headquartered Micron Technology is scouting a location for the facility and is rumoured to be in talks with Gujrat and Tamil Nadu for the same.  Sahasra Semiconductors with a total investment of Rs 750 crore will be in setting up a testing and packing unit at Bhiwadi in Rajasthan. Even the State of Karnataka is already in talks with a number of companies for the same. “We are getting in very big numbers. Many companies have come forward with OSAT - outsourced assembly and test and ATMP (plans). We are working with them and already many proposals have come. Karnataka’s Electronics Systems Design & Manufacturing (KESDM) policy also is very encouraging and positive. We are working aggressively in many of these areas and trying to promote our ESDM policy as the policy incentives we are offering are the best in the entire country” added the minister.

With regard to the KESDM policy and manufacturing of batteries, Karnataka has got plenty of offers and plenty of proposals have already been cleared. Of the top three companies – battery maker Exide will invest Rs 6,000 crore to set up a Lithium-ion cell manufacturing factory in Karnataka. The state has also cleared a Hyundai company subsidiary for the manufacturing of batteries among one more proposal.