Karnataka might be inching closer to acquiring the ISMC deal

ISMC Digital Fab, one of three applicants for the center’s $ 10 billion incentive package for semiconductor manufacturing, has agreed to invest $ 3 billion in a plant in Gujarat’s Dholera Investment Region but has shifted its focus to Karnataka due to a favorable government incentive package and a plentiful supply of a critical resource – water.

According to people acquainted with the proposal, the southern state has recommended Mysuru as an investment location for ISMC, which has proposed an electronics and systems design cluster.

ISMC Digital is a partnership between NextOrbit Ventures and Tower Semiconductor, an Israeli semiconductor technology business that was recently acquired by Intel for $5.4 billion. The other two bidders on the key incentives announced at the end of last year are a Vedanta-Foxconn joint venture and Singapore-based IGSS.

“ISMC has viewed the sites and dialogue is underway,” said one person who was directly aware of the deal. “States are aware that the first state to land the semiconductor ecosystem will benefit in the long run, which is why there is a cry for it.”

According to a Gujarat government official, exploring alternatives is standard procedure for multibillion-dollar projects, and the state government “has a signed MoU” with the ISMC consortium. “They will look at alternatives for every project of this size.” “That doesn’t mean it’s confirmed (that they’re leaving Dholera),” the official explained.

Tower Semiconductor and officials from the Gujarat government’s Dholera Investment Region did not respond to emails sent to them. Intel said it would not comment on Tower’s plans because it “was still an independent firm” in a statement to ET. Karnataka’s industrial department officials declined to comment.

In 2017, the NextOrbit group signed an agreement with Gujarat’s Dholera Economic Region, but a new incentive package that was supposed to be announced this year as part of the Western state investment jamboree, Vibrant Gujarat, never materialized. Meanwhile, the state of Karnataka has been looking for semiconductor investments. Prime Minister Basavaraj Bommai vowed that the state would receive a plant as soon as possible.

However, Karnataka’s High-Level Approval Committee, chaired by Bommai, has yet to formally approve ISMC’s investment request. The committee approves investment proposals worth more than Rs 500 crore. The government will consider a proposal for a unique package of incentives if the investment is strategic and large-scale.

“The demand for digital devices and electronics products is only increasing. If you have seen our electronic vision document, we have announced a target of USD 300 billion in electronic manufacturing with USD 120 billion in exports. Our consumption, based on USD 300 billion electronics (production target in 2026), will be nearly $ 70-80 billion semiconductors, “he said.

Karnataka isn’t the only one in the race of acquiring ISMC and other semiconductor fabs deal

Karnataka is one of a group of Indian states vying for one of three incredible semiconductor projects. The Ministry of Information and Communications Technology and Electronics has established an industry-academic panel to accomplish the objective of indigenizing the semiconductor supply chain, which has hitherto relied heavily on Chinese and Taiwanese knowledge and imports.

On April 29, Prime Minister Narendra Modi will open the first Semicon conference in Bengaluru. Significant transactions between global semiconductors and Indian states will be unveiled at the three-day event, according to industry leaders who are aware of the program. The increase in Indian semiconductor investment corresponds with global demand for semiconductors amid a supply deficit that is predicted to last until 2022.

According to the Indian Electronics and Semiconductor Association’s manufacturing supply chain research, the Indian option will be worth $ 85-100 billion by 2030 in a global market worth $ 550-600 billion.

also read:

Apple rumored to increase the production of iPhone 13 Pro, iPhone 13 Pro Max by 10 Percent 

source