Three companies which have applied for the RFP to set up a semiconductor plant are readying for the next big steps by working on finalizing their technology partners in order to meet the government’s eligibility criteria for incentives under the semiconductor scheme.
It is expected that the winning player, or players, will be issued a letter of intent to go ahead sometime in August this year, say sources in the know.
Ajay Javan, founder and CEO of the Next Orbit-led international consortium ISCM, says it has submitted a definitive agreement signed with Israel-based Tower Corporation (which is being acquired by Intel) which meets the request for proposal criteria of running the 65 nanometer fabrication and licensing of production grade technology.
Sources say that while Intel has ratified the deal, it cannot commit itself on paper until all legal approvals for the acquisition are completed. Javan had earlier said the consortium might also take a 10-15 per cent stake in Intel. The latter declined to comment on this.
As part of the eligibility criteria, the applicant companies in a JV or a consortium should either own and operate 65/45/28 nanometer or advanced node processes in a semiconductor fab or own or possess production grade license technologies for a 28 nanometer process and demonstrate the roadmap to advanced node technologies through licensing or development
Singapore-based IGS S ventures has, among others, tied the knot with Belgium-headquartered Inter University Microelectronics Center or IME C, a non-profit international research and development organization in semiconductor technology for the licensing of technology.
Providing details for the first time of the technology partnership road map for its chip foray, IGS S Ventures CEO and founder Raj Kumar says that it is looking at making chips from 28-65 nanometers in India.
“We have IME C as our tech licensing partner for specific technology. It is non-exclusive and we don’t need exclusivity. The key aspects will come from us, our team and the rest of the stakeholders. We have subsidiaries and two of our stakeholders for project Surya (IGS S has signed an MO U with the Tamil Nadu government to set up a semiconductor park) are bringing in technology,” he says.
But he added that his priority is to ‘settle one other key, important partnership to make this truly successful in India’. Kumar will share the details and plans with the media in August.
IME C is one of the few R&D organizations in the world which licenses its technology to fab plants and even undertakes sponsored research in new cutting-edge technologies.
Funded by the Belgian government, the European Commission and the industry, it has over 5000 scientists and is in over 95 countries, including having an office in India. It also has over 600 industry partners, which include the biggest names in the industry, from Intel to Samsung.
Experts say that the RFP rules state that a technology partner with an operating fab can only license ‘production grade’ technology. So IME C might not meet this criterion because, as a technology provider, it has only a small fab primarily for research.
But sources in IGS S say that both IME C and one of its consortium stakeholders which is a commercial player is running and offering 28 nanometer technologies, so there is no issue in meeting the qualification criterion.
In the case of the Vedanta-Foxconn JV, its Taiwanese partner is new to the game. Known for being a global EMS player, especially for Apple phones, it has bought a chip plant in Taiwan and is setting up JV's with chipmakers in Malaysia.
Vedanta JV partner Foxconn (it will have a 40 per cent stake in the chip company) last year acquired Taiwan-based plant Macro nix International, which manufactures wafers used in cars. This was part of Foxconn’s big push to make electric vehicles and protect itself against the global chip shortage.
Foxconn India and Vedanta are looking to concentrate on chips of 28 nanometers, as they have the largest market in the country. However, experts say that Foxconn’s Macro nix makes chips of much higher nanometers. Vedanta did not respond to queries about its technology partner plans.
Vedanta declined to respond to queries on their plans. Sources say that it has even had talks with IME C.
In Malaysia, Foxconn has picked up a minority stake in DEX, which is the parent company of chipmaker Sierra. Even here, Foxconn has signed up a JV with DEX to set up a wafer plant producing over 40,000 wafers per month in 28-40 nanometer technology with a focus on electric vehicles. It is a technology that is relevant for India, but the plant is not commercially off the ground.
Experts point out that the simpler way to bring in chip manufacturing is to woo fab or chip making companies such as Intel, TSMC and Global Foundry into setting up operations here. Yet the government has not been able to lure any of these giants.
The other way is to form consortiums and JV's (like the three proposals) which, apart from getting funding, have to acquire or license technology. This is a more complex process with uncertain results.
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