Heavy! Awarded $1 billion in cash for building a fab in India!

On April 1, according to a Reuters report, two Indian officials stated that India will reward each company that comes to the country to set up a chip manufacturing plant with more than $1 billion in cash!


At the same time, India is seeking to establish its own smartphone assembly industry and strengthen its electronics supply chain.

According to the report, the “Made in India” initiated by Indian Prime Minister Modi has helped the country become the world’s second largest producer of mobile phones, second only to China. New Delhi believes that it is now the turn of chip companies to set up factories in the country.

“The government will give each company that sets up a chip manufacturing business more than $1 billion in cash rewards,” a senior government official told Reuters. The official declined to be named because he was not authorized to speak to the media.

“We assure them that the government will buy, and will order the private market (companies buy locally produced chips).”

Another government source said that how these cash rewards will be issued is still undecided; the government has solicited opinions from the industry. The source also requested anonymity.

Governments around the world are subsidizing the construction of semiconductor factories, because the shortage of chips plagues the automotive and electronics industries, and highlights the global dependence on Taiwan’s supply. India also hopes to establish reliable suppliers for its electronics and telecommunications industries to reduce its dependence on China after the border conflict last year.

But the source did not specify which semiconductor companies are interested in setting up factories in India.

India has tried to attract semiconductor companies before, but India’s unstable infrastructure, unstable power supply, bureaucracy and poor planning will hinder the company’s development. Industry insiders said that with the success of the Indian smartphone industry, the government’s new round of efforts to attract chip manufacturers is more likely to succeed.

According to sources in the automotive industry, earlier this year, officials from the Ministry of Technology of India met with senior executives from the Association of Indian Automobile Manufacturers (SIAM) to assess the demand for chips from automakers. The Indian government estimates that it will take approximately US$5-7 billion to build a chip manufacturing plant in India, and it will take 2-3 years after all approvals are in place. The source added that New Delhi is willing to provide concessions to companies, including exemptions from tariffs, research and development expenses and interest-free loans.


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