The Indian government has announced a fresh call for applications to seek incentives for establishing semiconductor and display manufacturing fabs. This move follows the reported denial of benefits to a joint venture between Vedanta Resources and Foxconn under India's semiconductor mission.
Alongside the Vedanta-Foxconn JV, Singapore-based IGSS Ventures and ISMC, a consortium of Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor, had also applied for the incentives. IGSS and ISMC plan to reapply, according to top executives from the respective consortiums. However, Vedanta-Foxconn has not responded regarding their plan of action.
According to a report, the government decided to reject incentives for Vedanta-Foxconn's proposed 28 nanometer semiconductor manufacturing facility due to the JV's failure to secure a technology partner or license manufacturing-grade technology within nine months of announcing their plans. An inquiry regarding Vedanta's intention to reapply for the incentives remained unanswered.
Raj Kumar, Founder and Group CEO of IGSS Ventures, stated that they will indeed reapply for the fab project in India, with plans to make changes based on discussions with the ISM, the nodal agency for the program. They intend to bring a major global semiconductor company on board as the lead investor of the consortium.
The ISM has expressed the need for a large anchor investor for the project. The consortium already has three global investors who have committed equity. Ajay Jalan, founder and MD of Next Orbit Ventures, confirmed that ISMC will also reapply, despite earlier indications from ISM that Next Orbit, a financial investor-run equity fund, should sell its stake to an Indian company.
While the Vedanta-Foxconn JV may file a new application to meet the government's criteria, the delay in receiving incentives, which cover 50% of the development costs of the fabrication unit, is considered a setback.
