Inox Air Products, the largest industrial gas producer in India, is embarking on a significant investment initiative. The company plans to invest between Rs 300-500 crore to establish state-of-the-art ultra-high purification facilities and create a robust supply chain for gases crucial in semiconductor fabrication processes within India.

Managing Director Siddharth Jain revealed that these investments will commence on a small scale this year, with plans for substantial expansion aligned with the demand generated by semiconductor fabrication companies establishing their operations in India in the coming years. Inox Air Products has initiated the purification of essential gases like oxygen, nitrogen, argon, helium, nitrous oxide, methane, silane, and ammonia, laying the foundation for converting them into ultra-high purity gases, vital for chip fabrication.

Semiconductor manufacturing necessitates 50 different, extremely pure gases, of which only eight are currently available in raw form in India. The remaining 42 gases are imported, along with the necessary infrastructure for their transportation and storage. Jain emphasised that while immediate massive investments might not be necessary, they are imperative for the long term, especially as India attracts major chipmakers like Micron to establish chip assembly, testing, monitoring, packaging units (ATMP), and eventually chip fabs domestically. Inox AP, as a key supplier of raw materials to chip fabs and solar cell manufacturers, is in discussions with various chip fabs and ATMP units exploring India as their potential base.

Regarding the estimated capital expenditure (capex) required for these endeavours, Jain stated that, given the current discussions with electronic semiconductor players, the total capex could range between Rs 300 crore and Rs 500 crore if all plans and investments materialise. Inox AP's initial capex is focused on the supply chain, while the infrastructure for manufacturing many of these specialty gases would continue to be imported due to the existing volume constraints.

Jain also noted that the first semiconductor fab in India would rely on imported gases. However, with the announcement of two or three fabs, technology collaborations would be initiated to attract these manufacturers to establish their operations within the country.

In addition to catering to semiconductor industry demands, Inox AP, which is 50% owned by US-based Air Products, has plans to supply gases to prominent solar cell manufacturers in India, including Adani Group and Jupiter International. The company has already signed a 20-year agreement with First Solar, a leading American solar technology company, for the design, engineering, installation, and operation of a cryogenic nitrogen generator to supply high-purity nitrogen. Furthermore, Inox AP is investing Rs 1300 crore in setting up air separation units for Tata Steel, marking its diversified engagements in the industrial gas sector.

Source: Mint