Taiwanese contract manufacturer Foxconn has reportedly joined hands with French-Italian semiconductor company STMicroelectronics to set up a semiconductor plant in India.
The companies have applied for the Centre’s incentive scheme to establish a 40-nanometer chip plant in the country, Bloomberg reported citing sources. Such chips find usage in cars, cameras, printers, among others.
As per the report, the government has asked Foxconn for more details about the partnership with STMicro. The contract manufacturer is also in talks with multiple other companies that boast of chip-making technology, the report said.
It is largely expected that Foxconn will have to make detailed disclosures to the authorities on a slew of aspects to avail the incentives.
The company will have to specify more details on whether it has binding agreements with a technology partner and shed more light on the financing plans. In addition, the companies may also have to specify the kind of semiconductors they intend to manufacture and the target customers.
The report comes two months after Foxconn pulled out of its proposed $19.5 Bn joint venture with Indian conglomerate Vedanta to manufacture semiconductors in the country.
The move to onboard a foreign partner, rather than an Indian company, is likely the result of the lack of expertise in the chipmaking space in the country. Vedanta and Foxconn both have no prior experience in the semiconductor space.
With STMicro, Foxconn could be looking to leverage the semiconductor major’s expertise and experience to manufacture allied products in India.
The development comes at a time when India has been rolling out a red carpet for global semiconductor companies to fuel manufacturing in the country and cut dependence on neighbouring China. With an outlay of INR 76,000 Cr, the Centre’s ambitious production linked incentive (PLI) scheme for manufacturing semiconductors and display fabs aims to woo investors and companies to set up their base in the country.
As a result, a slew of companies have made a beeline for the country. In June, following Prime Minister Narendra Modi’s visit to the US, Micron announced a $2.75 Bn commitment to set up a DRAM (dynamic random access memory) and NAND assembly, testing, marketing and packaging (ATMP) facility in India.
Applied Materials also plans to invest $400 Mn over the course of next four years to set up a semiconductor centre for commercialisation and innovation in India. As per the government, the investments will likely generate more than 20,000 direct and indirect jobs in the country over a span of next five years.
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