Indian company invests $1bn for semiconductor manufacturing facility in Tamil Nadu

Rao said the company has filed for a 25% subsidy on capital expenditure through the government’s production-linked incentive (PLI) scheme for semiconductor manufacturing, and has received “in-principle approval” for the first phase of investment. Under this phase, Polymatech has signed a Memorandum of Understanding (MoU) with the Tamil Nadu government, and has invested $130 million to expand its facility in the state.

Polymatech claimed that its semiconductor manufacturing and packaging facility will begin production of the chips within the next “few weeks”.

Chip makers across the world are believed to be in talks with the central government to build chip manufacturing, assembly, testing and packaging facilities in the country. In May, a government official who requested anonymity told Mint that several companies, including Taiwan Semiconductor Manufacturing Company (TSMC) — the world’s largest chipmaker by volume — were in talks with various state governments. Establishment of semiconductor manufacturing facilities.

The first chip manufacturing facility is likely to be approved by the end of 2022, the official said.

On 20 July, Union Minister of State (IT) for Electronics and Information Technology (IT) Rajiv Chandrasekhar told Parliament that the Ministry of Electronics and IT (Meity) had received 23 applications for the Semiconductor PLI Scheme. The scheme, announced in December last year, offered incentives up to Rs 2.3 lakh crore to attract firms engaged in semiconductor manufacturing, testing, packaging and design.

Rao said the company will “indigenise” the various components required in semiconductor chip manufacturing. “We are now importing silver paste (an essential ingredient in chip manufacturing), and high-temperature co-fired ceramic substrates. We are importing them. Today, but will eventually produce them in-house,” They said.

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