India to take EOI from foreign chip makers

India’s Ministry of Electronics and Information Technology (MeitY) on Thursday said it will take expression of interests (EOI) from foreign chip makers to build semiconductor wafer fabs, local media Swarayja reports.

The deadline is January 31 and the ministry is taking applications from integrated device makers and foundry companies. MeitY is hoping companies with 28-nm tech or smaller and those that use 300mm wafers send the EOIs.

Companies that produce 200mm or larger wafers can also apply. Related suppliers can also apply.

The Indian government will provide guaranteed interest account, viability gap funding, long interest financing, text benefits and infrastructure, the media report said.

A MeitY spokesperson told Swarayja that the Indian electronics market grew from final assembly and printed circuit board assembly but lacks the ecosystem for electronic components and semiconductors.

India, with its population of 1.3 billion, is the only country considered capable of replacing China for growth and labor power. The average age is 10 years lower than Chin and US at 28 years old. The country has been growing around 6% a year for the past five years.

Multiple Indian government representatives in South Korea have expressed interest in collaborating with South Korea companies. India’s ambassador to South Korea, Sripriya Ranganathan, told a local forum in July that there will synergy between India’s manufacturing capabilities and South Korea’s technology. Pravin Rao, Infosys COO and executive council of National Association of Software and Service Companies of India, in October told the audience at India Business Forum 2020 held in South Korea that combining South Korea’s manufacturing excellence and India’s software power could lead to excellent products.

Samsung Display is currently building its OLED module line at Noida, Indai. The company received around 100 billion won in funding from the local government as well as tax benefits. Samsung Electronics build its smartphone factory at Noida, which was completed in July, 2018.

More South Korean companies are showing interest in expanding to India over China in recent years, people familiar with the matter said. While China remains a large market, US sanctions against China and allegations of talent leak from South Korea to China is making expansion their less favorable than it was before, they said.

Semiconductor investment is expected to increase in India going forward, they said, and South Korea semiconductor equipment maker are showing strong interest to expand there.

Meanwhile, challenges for semiconductor industry to take root in India remained. Samsung faced multiple difficulties in building its smartphone and OLED module factory in India, a person familiar with the matter said. Semiconductor production requires stable supply of water and electricity and an infrastructure that can guarantee these is crucial for an ecosystem to take root in India, they said.