India’s government is set to deny billionaire Anil Agarwal vital funding for his chip venture, a blow to a $19 billion push to make semiconductors in the country.
The government is likely to tell the venture between Agarwal’s Vedanta Resources Ltd and Taiwan’s Hon Hai Precision Industry Co it will not get incentives to make 28-nanometer chips, people familiar with the matter said. The venture has applied for such assistance, which is potentially worth billions of dollars, but has not met the criteria set by the government.
While Vedanta and Hon Hai can reapply, a rejection would mean a delay to Agarwal’s ambition to set up India’s first major chipmaking operation, even as his metals and mining group seeks to reduce heavy debt. struggle to do.
Nine months after Agarwal announced the chip partnership to build India’s “own Silicon Valley,” the project has yet to find a technology partner or license manufacturing-grade technology for the 28nm chips, the people said. he said. At least one of those steps is required for the enterprise to receive government assistance.
Vedanta and Hone Hai, the assemblers of most of the world’s iPhones, do not have any significant chip-making experience. Their difficulty in finding production-ready technology underscores how difficult it is to set up new semiconductor plants, with large-scale complexes costing billions to build and requiring very specialized expertise to run.
A Vedanta representative said the company was awaiting the outcome of its application to the government. Hon Hai, widely known as Foxconn, did not respond to an email seeking comment.
Prime Minister Narendra Modi has pledged $10 billion to woo chip makers to India, promising that his administration will bear half the cost of setting up all semiconductor sites.
Vedanta had earlier said that its partner Hon Hai had acquired “production-grade, high-volume” 40nm technology and “development-grade” technology for the more sophisticated 28nm chips. That’s not enough for the government to provide funding, people said, because the enterprise actually applied to produce 28nm chips.
The federal government may soon ask Vedanta to submit a fresh application for financial assistance and give revised capital expenditure estimates to make 40 nm chips. Such a bid could be considered after New Delhi reopens the application process for incentives, part of a push to woo potential chip makers to the country that has so far met with little success.
India’s technology ministry did not respond to a request for comment.
Vedanta had earlier presented a capex estimate of $10 billion to India. Financial help from the state is important for Agarwal, whose Vedanta is working to reduce gross borrowings to $6.8 billion by April.
Bloomberg News had earlier reported that Vedanta is in talks with STMicroelectronics NV to license the chip fabrication technology. It hasn’t publicly named any partners yet.
This news is auto-generated through an RSS feed. We don’t have any command over it. News source: Multiple Agencies: hindustantimes, techrepublic, computerweekly,