India is trying to bring not just manufacturing but a part of the entire chip ecosystem to the country
Nations across the world are gearing towards getting semiconductor manufacturing in-house. So is India, with its Rs 76,000 crore financial incentive scheme. India is trying to bring not just manufacturing but a part of the entire chip ecosystem to the country. Foreseeing the growing demand for chips in the coming years, leading foundries (that manufacture chips) are already expanding their manufacturing base. Intel, too, has committed huge investments in fabs (semiconductor manufacturing plants) in the U.S. and Europe. As India is still in a wait-and-watch mode, most wonder if Intel will build a semiconductor plant in the country.
Well, this isn’t wishful thinking. After all, the company had attempted the same multiple times in the past, in 1969 and again in 2005. But is India a bit too late, and is Intel willing to invest now is the question?
Robert Noyce, the co-founder of Intel, visited India in 1969 to explore the opportunity of setting up a semiconductor manufacturing facility in the country. Unfortunately, at that time, the government told him he could only set up a fab that would not exceed hundreds of thousands of chips, [which was] a complete non-starter.
Once again, in 2005-06, leading chip giant Intel had planned to set up a multi-billion-dollar investment in India, but the then government was slow in coming up with the semiconductor manufacturing proposal.
In 2007, the former Intel CEO and Chairman Craig Barrett stated that the Indian government was a bit slow in coming out with its semiconductor manufacturing proposal and missed the window of Intel’s period of time as the company had to commit next tranches of manufacturing capacity.
Later, the company said it would build a $2.5 billion, 300mm wafer fabrication plant in China instead. Around the same time, India lost Intel’s chip assembly and testing plant to southern Vietnam. The same was echoed by Sunil Bharti Mittal, founder and chairman of Bharti Enterprises, at one of Business Today’s events that Intel approached India to set up a major chip manufacturing plant in the country, but we lost that opportunity. “Intel came. This was, I think, during Craig Barrett’s time during Dr Manmohan Singh’s time. I had long conversations. They wanted to set up a very major chip manufacturing plant here. They wanted some land; they wanted some subsidies. We could not give them. It was a small little gesture from India. That factory shifted from India, and we lost that forever.”
And now, when India is ready and serious about making semiconductors in-house, it seems Intel isn’t ready yet. Pat Gelsinger, CEO of Intel, who visited India in April 2022, is excited about India’s seriousness for chip manufacturing but isn’t ready to invest in the country yet. Nivruti Rai, Country Head, Intel India and VP of Intel Foundry Services, recently told Business Today, “So the government has made the incentives really attractive. Intel always has its eyes and ears open for where the opportunity is and where the market is. But unless we have a market, building a fab without a domestic market is not a good idea. Intel continues to evaluate and gauge what are some of the opportunities.”
Just over this last year, Intel had committed expansions in Germany (Europe), a greenfield expansion in Ohio (USA), and a brownfield expansion in Arizona (USA). “So for the next few years, we are quite invested. But as you said, we have looked at India in the past and will continue to look. And more so with our incentives, a lot of those PLI schemes, I think India has some good opportunity, and its candidacy is high,” adds Rai.
India will soon open the semiconductor scheme for the second round of applications. And as Minister of Electronics & IT Ashwini Vaishaw stated, the government is in advanced talks with four leading fabs; we can only hope Intel is one of them.
https://www.businesstoday.in/amp/tech-today/story/is-intel-planning-to-build-a-semiconductor-manufacturing-plant-in-india-372119-2023-03-03
