Foxconn, chip giants head to Modi's home state for India conference

Tower Semiconductor

26/07/2023 11:05

By Munsif Vengattil and Sumit Khanna
       GANDHINAGAR, India July 26 (Reuters) - Top executives
from Foxconn and semiconductor firms Micron and AMD will this
week attend a conference in Prime Minister Narendra Modi's home
state, as the government tries to lure investments into India's
nascent chip industry.
    India wants to establish itself as a semiconductor
manufacturing hub, rivaling the likes of Taiwan, and the high
demand for chips means the local market will be worth $80
billion by 2028, almost four times its $23 billion size now.
    But Modi's plan has so far floundered. In 2021, his
government announced a $10 billion scheme for domestic chip
manufacturing, attracting interest from companies including
Foxconn  2317.TW  and local conglomerate Vedanta Ltd  VDAN.NS ,
but none of these proposals have materialised.
    Modi will inaugurate the annual SemiconIndia conference in
Gandhinagar, in western state of Gujarat, on Friday. Speakers at
the three-day event include Foxconn Chairman Young Liu, Micron
 MU.O  Chief Executive Officer Sanjay Mehrotra, and Advanced
Micro Devices  AMD.O  Chief Technology Officer Mark Papermaster.
    The event comes just weeks after Foxconn backed out of a
$19.5 billion chips joint venture with Vedanta, saying "the
project was not moving fast enough". Foxconn has since decided
to go solo.  
    Two other consortiums, including one that involved Israel's
Tower Semiconductor  TSEM.TA , had announced plans to invest $3
billion each, but the proposals have since stalled.
    The government recently issued another invitation for
companies to apply for chip incentives.
    US-based Micron in June announced it will invest $825
million to build its first factory in Gujarat for testing and
packaging chips, but not manufacturing. 
    At its crowded booth at the conference venue, Micron
displayed samples of chips, as well as QR codes linking to its
job openings for technicians and wafer dicing process engineers
in Gujarat.
    Delegates from 23 countries will attend SemiconIndia, but
India's credentials as a semiconductor manufacturer have yet to
be established, with investors facing slow approvals from
various levels of government and lack of a reliable supply chain
for raw materials.
    "India is still not a proven ground. Which explains the
skepticism of global chip giants to come here and set shop,"
said Arun Mampazhy, a former India manager of U.S.-based
chipmaker GlobalFoundries.

 (Reporting by Munsif Vengattil in Bengaluru and Sumit Khanna in
Gandhinagar, Gujarat, Editing by Aditya Kalra and Miral Fahmy)
 ((munsif.vengattil@thomsonreuters.com;))