ISMC consortium to be first to start work on chip foundry in India

The International Semiconductor Consortium’s (ISMC’s) proposed $3 billion chip fab in Mysuru is likely to start construction as early as February if the central government okays the company’s application for financial incentives.

ISMC is one of the three consortia shortlisted by the Centre to be eligible for the incentives. The three proposals for wafer fabs worth $13.6 billion have sought government support to the tune of $5.6 billion.

“We will probably become the first state in India to have a semiconductor fab. ISMC has the technology and the capability. Subject to the central government’s approval, we hope to see work starting on this plant from February,” Karnataka minister for information technology, electronics, and skills development, Dr. C.N. Ashwath Narayan, said in an interview.

He added that ISMC would make 40-65 nanometre (nm) analogue chips to “cater to the defence and automotive sectors, and then to other areas”.

The minister said he expects the semiconductor foundry to take four years to build, “but it can happen earlier too”.

As the world battled chip shortages that crippled industries during the pandemic, India offered chipmakers incentives, including financing as much as half of the project cost, to build a fab ecosystem in the country and cut its reliance on China.

The US decision to impose sweeping restrictions on the sales of semiconductors and chipmaking equipment to China is also encouraging companies to consider India as an alternative destination.

While India has expertise in designing chips, the absence of semiconductor fabs means it has to rely on imports for all its chip requirements.

Local policymakers hope the design capabilities of Indian companies will also attract companies to set up chip plants in India.

“The strength of Karnataka is design, where we are No.2 in the world. From chip designing, we now want to become a chipmaker,” Narayan added.

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