The iPhone manufacturer Foxconn and the Indian group Vedanta are jointly investing almost 20 billion dollars in a completely new chip location. The partners are building a semiconductor factory and plants for packaging and testing the components in the Indian state of Gujarat. In addition, a screen production is planned, as the companies announced on Tuesday.
This is good news for customers in the chip industry who are plagued by supply bottlenecks. This is because semiconductors of mature technology generations with a so-called structure size of 28 nanometers are to be produced at the new location. It is precisely these components that the German industry has been missing for more than two years. In addition, many of these chips currently come from China, which is increasingly perceived as a risk in view of the lockdowns in the country and the political tensions with the People’s Republic in the West.
India has been trying to produce its own chip for decades – so far largely unsuccessfully. With massive state subsidies, the country has now succeeded for the first time in finding investors for large-scale production. Series production should begin in two years, with 100,000 jobs to be created, Vedanta Chairman Anil Agarwal said on Tuesday. “India’s Silicon Valley is one step closer,” the billionaire wrote on Twitter.
India attracts investors with billions in subsidies
The Taiwanese group Foxconn is to contribute technological expertise, the financing is largely provided by the Vedanta conglomerate. However, Foxconn has so far played a role in the semiconductor industry primarily as a customer: the chips for the iPhones have so far come from the technology leader TSMC, also based in Taiwan, Foxconn then assembles the devices that Apple develops and sells.
The Indian government announced a ten billion dollar subsidy program in December. The project should benefit from this. Politicians around the world are currently urging chip companies to produce in their own country and thus avoid the supply bottlenecks that have been going on for more than two years in the future. The number two in the chip industry, Intel, has already launched publicly funded billion-dollar investments in Europe and the USA.
Meanwhile, two more chip plants are to be built in India: the ISMC consortium wants to invest three billion dollars in the construction of a factory in the state of Karnataka, as the local government announced at the beginning of May. The project is expected to create 1,500 jobs. IGSS from Singapore wants to create just as many jobs in the state of Tamil Nadu, spending $ 3.5 billion on a new chip location.
“Semiconductors play a key role in the world,” India’s Prime Minister Modi said at an industry conference in late April. The government estimates that the chip market in India will grow to a volume of $ 63 billion by 2026 – from $ 15 billion in 2020.