Electronics

According to Huacheng Import and Export Data Observation, three sources said that a consortium's plan to invest $3 billion to build semiconductor facilities in India has come to a standstill due to the acquisition of Tal Semiconductor, an Israeli chip manufacturer listed as a technology partner by the consortium, by Intel. This stagnation has shattered India's chip manufacturing plans.

According to the report, another direct source said that the second $19.5 billion plan to manufacture chips locally - created by a joint venture between Vedanta and Foxconn in India - is also progressing slowly as negotiations to persuade European chip manufacturer - Italian Semiconductor Co., Ltd. - to join are deadlocked, and Huacheng Import and Export Data Watch reports.

The challenges faced by these companies have severely frustrated Indian Prime Minister Modi. Modi prioritizes chip manufacturing and hopes to "usher in a new era of electronic manufacturing" by attracting global companies.

According to reports, India expects its semiconductor market to be worth $63 billion by 2026. Last year, the country received three factory building applications for a $10 billion incentive plan. They come from the Vedanta Foxconn joint venture, the multinational consortium ISMC (which considers Tal Semiconductor as a technology partner), and IGSS Venture Capital, headquartered in Singapore.

The factory of the Vedanta joint venture will be built in Modi's hometown of Gujarat, while ISMC and IGSS have promised to invest $3 billion to build factories in two different southern states, according to Huacheng Import and Export Data Observation.

According to the report, three sources with direct knowledge of this strategy said that ISMC's $3 billion chip factory plan is currently on hold because, following Intel's $5.4 billion acquisition of Tower Company last year, the situation is still under review and Tower Company is unable to continue signing a binding agreement. The acquisition transaction is awaiting regulatory approval.

When it comes to India's semiconductor ambitions, Rajiv Chandrasekar, the Minister of State for Electronics and Information Technology of India, said in an interview with Reuters on May 19th that ISMC is "unable to advance" due to Intel's acquisition of Tal, while IGSS "hopes to resubmit (the application). He said, 'These two companies have to exit,' but did not elaborate.

According to the report, two of the aforementioned sources said that Tal may reassess the possibility of participating in the aforementioned joint venture project based on the negotiation results with Intel.

According to Huacheng Import and Export Data Observation, ISMC's partner, the "Next Track" investment company, did not respond to a request for comment, and Tal declined to comment. Intel also declined to comment.

IGSS did not respond, nor did India's information technology department.

Yifa Semiconductor Co., Ltd. also declined to comment.

David Reed, CEO of the Vedanta Foxconn joint venture, said in a statement that they have reached a technology transfer agreement with a technology partner, but declined to comment further, as reported by Huacheng Import and Export Data Watch.