Fab In Tamil Nadu: A Short Note On Singapore-based IGSS Venture's ₹25,600 crores Plans For A Semiconductor Chip Manufacturing Complex

Singapore-based IGSS Ventures has announced plans to invest ₹25,600 crores ($3.25 billion) in Tamil Nadu over the next five years to set up a semiconductor fab unit and a high-tech semiconductor park.

An MoU (memorandum of understanding) was signed to this effect between IGSS Ventures and the Tamil Nadu Guidance Bureau, the state government's nodal agency for investment promotion and single-window facilitation,

The state's guidance department said it had allocated nine strategic sites, including two sites near Chennai, to house a semiconductor fab. Other media reports indicate that the ask is for a 300-acre land.

IGSS Ventures is among the three entities that have submitted applications in February this year seeking incentives under PM Narendra Modi government's Rs 76,000 crore Semicon India Programme for setting up Semiconductor Fabs in India for manufacturing semiconductor chips. Vedanta Foxconn JV and ISMC are the other two applicants.

Earlier in May, ISMC, representing a consortium of investors led by Abu Dhabi-based Next Orbit Ventures along with Israel's Tower semiconductors as a technology partner, signed an MoU with the Karnataka government to set up a $3 billion 65-nm analog fab. The fab is proposed to be set up on 150 acres of land in Kochanahalli Industrial Area in Mysuru District. Intel is acquiring Tower Semiconductor for $5.4 billion.

Vedanta-Foxconn, the third applicant, is reportedly looking for 1000 acres to set up its proposed $7-8 billion 28-nm semiconductor fab and display fabs. The JV is said to be in discussions with states like Gujarat, Maharashtra and Karnataka.

IGSS proposal

IGSS Ventures is a technology investment holding company that focuses on "building companies with competitive advantages in ground-breaking technologies". Very few details are available on the proposal or technology partnership it has forged.

In a recent interview, Raj Kumar, Founder CEO of IGSS Ventures Singapore, said that the group has experience in providing fab transformation and management services to IDMs and foundry fabs in the US, Europe, UK, Taiwan, South Korea, Singapore and Malaysia.

IGSS says that with the proposed Rs 25,600 crore investment, it will have a fab that runs 28-nm, 45-nm and 65-nm technology. However, some industry experts are sceptical about these claims. According to their estimates, at the level of investment proposed by IGSS, it would be challenging to achieve the scale indicated by their plan.

A quick back-of-the-envelope calculation based on the incentives offered by the union government, the incentive sought by the IGSS proposal is likely to be a tune of close to $1 billion. The investment size means that IGSS is likely to have proposed setting up a 65-nm (or close) fab.

The only technology provider IGSS has mentioned so far is the Interuniversity Microelectronics Centre (IMEC).

IMEC is what can be called an intermediate research organisation in the world of semiconductor fabs. It is predominantly an R&D institute, not a high-volume commercial fab. It lacks experience in high-volume manufacturing and tech readiness.

Swarajya earlier published a detailed analysis titled "Would IMEC Qualify As A Technology Provider For Commercial Silicon #FabInIndia?" You can read it here.

"IMEC model is very different compared to what they tout. They don't do complete technology development. They do process optimisation for established foundries and fabless companies. They have some IP libraries (highly reduced like Lite version), but that is not equivalent to what a typical foundry provides." one industry watcher said.

Given that new commercial silicon fabs in India will need a quick ramp-up in production to capture the market, the ideal applicant that government may provide incentives to is an established commercial fab bringing a technology already running in high volume production.

Some experts have also raised questions on the ability of IGSS to achieve funding closure even if they receive 50% of the funding required for the fab from the Central government (by proposing a 28-nm fab) and receive further incentives from the state government.

Related Read:

Would IMEC Qualify As A Technology Provider For Commercial Silicon #FabInIndia?

[Long Read] How Intermediate Research Institutions Can Bolster Semiconductor Manufacturing In India