India's semiconductor ambitions are on the verge of a significant boost, with Tata Group gearing up to apply for the government's semiconductor subsidy scheme. Insider sources from the Ministry of Electronics and IT have revealed that Tata is in the process of drafting a proposal, expected to be submitted within the next 3 to 6 months. Additionally, Tata is actively exploring collaborations with international technology partners.

Reports from sources close to the Centre indicate that Tata, a diverse conglomerate spanning from salt to information systems, is meticulously evaluating business plans along the entire semiconductor value chain. Apart from the central government's subsidy, several state governments, including Gujarat, Karnataka, and Tamil Nadu, are extending enticing incentives to woo Tata into their regions.

In a strategic move disclosed last year by Tata Sons Chairman, N Chandrasekaran, the conglomerate unveiled plans to venture into chipmaking. As part of Tata's $90-billion tech investment initiative, a substantial portion will be dedicated to forming partnerships with chip manufacturers and potentially establishing an upstream chip fabrication platform. Interestingly, Tata refrained from participating in the initial round of semiconductor and display fab proposals to the Centre in 2022.

Raja Manickam, Chief Executive Officer of TATA Outsourced Semiconductor Assembly and Test (OSAT), emphasised the importance of encouraging local players to lead India's ambition of becoming a semiconductor manufacturing hub, rather than solely relying on multinational corporations.

The India Semiconductor Mission, equipped with a substantial Rs 76,000-crore budget for manufacturing, packaging, and design units, has faced challenges in disbursing subsidies for semiconductor fabs. Despite announcing five proposals for the outlay last year, none came to fruition. A notable development under the government's subsidy scheme was American tech company Micron's $2.75-billion project to establish a testing and assembly facility in Gujarat. While companies like Vedanta and Foxconn have expressed interest, the Centre is yet to confirm the receipt of a viable proposal for a semiconductor fab.

Source: Business Line