Semiconductor fabrication plants or fabs are a strategic industry. Many foreign governments fund the fab plants. In the past India’s dream of fab manufacturing could not come true twice. India is trying third time to set up fab manufacturing. India is trying to rope in foreign players such as Intel, TSMC, Samsung, Infineon, Texas Instruments, STMicroelectronics and many others. The Government’s empowered committee of ministers is examining the proposal. Global players are interested in specialty fabs — wafers made of gallium nitride or silicon carbide used in multiple applications. The specialty fab plant needs a capital investment of $150-250 million as against a minimum of $4 billion for an integrated plant. Here the wafer size is 6-8 inches, as compared to a 12 plus inch size of a logic chip. However, even this will take 12 years to break even. It, therefore, requires financial support from the government at least to the extent of 50 percent.

It is desirable that an Indian consortium aquires or takes over an existing plant abroad and learn the tricks of the trade. Later the plant can be relocated to India.

Even some big fab manufacturers can be invited to set up plant in India. However. there is no manufacturing base here in India, and it is risky to invest $2 billion-$8 billion here.

India has a base of chip design, and has R&D centres. What it lacks is a huge domestic market, such as US.

It all depends upon the investment policy of the government. There should be fiscal incentives. These incentives should be exclusively for the fab manufacturing. They are not to be shared with display fab players, IoTs, and wearable device players.

Apart from capital investment, fab manufacturing demands commercial acumen. India lacks here too. A fab unit has to run at high capacity or else it could be a flop.