India’s first wafer factory is coming!

India’s first wafer factory has finally been confirmed!
On the 23rd of the 20th, the joint venture between Vedanta and Foxconn has finalized the Dholera special investment zone near Ahmedabad, Gujarat, India, where a wafer factory will be established.
Akesh Kumar Sharma, Minister of Electronics and Information Technology of India, said that India’s semiconductor production would start soon and would become one of several major partners with semiconductor manufacturing capacity in the world in the future.
India’s “core making dream”
It is reported that this cooperation is the largest enterprise investment since India’s independent history, and it is also the first semiconductor manufacturing factory in India.
As early as last February, there was news that Foxconn announced the signing of a memorandum of cooperation with Vedanta to jointly fund the establishment of a joint venture to manufacture semiconductors in India. Foxconn will become the leader of the cooperation plan. Vedant is a multinational group in India, starting with mining and natural resources management, and is the largest mining and non-ferrous metal company in India. Vedanta Group has not only diversified mining and natural resources, but also telecommunication engineering subsidiaries, optical fiber cable subsidiaries, glass substrate manufacturing companies, and has the manufacturing capacity of electronic parts.
It is reported that the monthly production capacity of this Indian wafer factory is expected to be 40000 chips. The initial goal is to produce 65nm process technology, which will be upgraded to 40nm process technology in the future, mainly used in automobile chips and defense chips.
India’s “core making dream” goes beyond this. Last May, it was reported that the relevant consortium was preparing to establish a wafer factory in India. Among them, the Next Orbit venture capital fund and the Tower Semiconductor decided to invest US $3 billion to establish a wafer factory in India, which is expected to be put into operation within four to five years.
It is reported that the Indian government is very optimistic about the investment plan of Hon Hai Group. Even if the joint venture plan of Foxconn and Vedanta to set up a semiconductor wafer factory fails to be realized, Foxconn has the opportunity to set up a wafer factory in India by virtue of its own capabilities.
The support of the Indian government can be seen from the “Gujarat Semiconductor Policy 2022-27” announced by the Indian government last July. The project is likely to receive huge subsidies and incentives, including but not limited to zero stamp tax on land purchase and industrial water and electricity subsidies.
According to this policy, eligible projects will receive 75% subsidy when purchasing the first 200 acres of land for the establishment of manufacturing units, and eligible projects will provide high-quality water at the price of 12 rupees per cubic meter in the first five years. In order to encourage investors under the policy, the Gujarat State Government also announced to refund 100% of the stamp tax paid by investors for the first time due to leasing, selling or transferring land. These preferential policies will greatly attract and encourage enterprises to invest and build factories in the local area.
It is undeniable that India has unique advantages in the chip circuit in addition to the cost-saving incentive policy. For example, in terms of talent reserves, India has nearly 55000 design semiconductor engineers working for different companies, accounting for 20% of global chip designers. And almost all of the top 25 semiconductor design companies in the world have research and development centers in India.
In terms of market, India is developing into the world’s second largest consumer market. According to data, the value in 2021 will be US $27.2 billion, and it will reach US $64 billion by 2026, which is not a small temptation for semiconductor manufacturers.
Although the first wafer factory located in India this time is invested by foreign investors and the production process intelligence reaches 65nm rather than cutting-edge, it is of great significance to at least enable India to have the ability to manufacture localized chips.