SOPS semiconductor plan suspended due to delayed ISM Chief selection

The delay in appointing a chief executive for the Indian Semiconductor Mission (ISM) is having a ripple effect in processing applications for the IT ministry’s $10 billion incentive programme to jump-start the semiconductor ecosystem, people aware of the discussions between top executives of Israeli tech company Tower Semiconductor and ministry officials said on Monday.

On an India visit, Tower Semiconductor CEO Russell C Ellwanger met Minister of State for Electronics and IT Rajeev Chandrasekhar on Monday, besides holding discussions with other officials in the ministry.

Tower, which has finalized an industrial cluster off Mysuru as its location, wants to get speedy approval for the central incentives for its application as part of a consortium ISMC Analog, in which Next Orbit Ventures is a participant.

“The crux of the discussions was around the time being taken to process the applications, and the reason advanced was the fact that there was no proper leadership at ISM to make recommendations to the ministry,” a person directly aware of the discussions said.

An industry representative aware of the government-industry dialogue on incentives said that “all proposals are being examined closely, and we should be able to get some clarity in about two months.”

The ISM, set up under the Digital India Corporation, operates as an independent business division under the IT ministry. According to its website, it is tasked with negotiating with applicants and deciding on many key parameters that would determine the incentive beneficiary: the right technology mix, applicants, node size/generation, and so on.

The government announced the setting up of ISM and the incentive scheme in December last year.

The Centre had also set up an advisory committee comprising bureaucrats, industry and academia to provide advice to ISM executives. A member of the advisory committee said on the condition of anonymity that it has not had a formal meeting since being set up in April, even though its members are in constant dialogue about the plans.

“We will meet shortly and there will be a decision very soon on the ISM CEO, too,” the member said.

Semiconductor industry veteran and analyst Arun Mampazhy said having a strong leadership at ISM would serve a purpose beyond clearing fab proposals.

“Review and guidance will need to be continually done for approved fabs. Many more fabs are needed to get to a sizable global market share, and Indian design talent must be tuned towards products, rather than just service-based efforts. All that needs strong leadership at the ISM,” he said.

Intel said in February that it was buying Tower Semiconductor for $5.4 billion, giving it a closer shot at the foundry market with an addressable market size of $100 billion.

The deal is expected to close in 12 months and Tower would be run independently with Ellwanger at the helm, it had said.

Besides the ISMC Analog consortium, Vedanta NSE -6.43 % Foxconn has also filed applications for semiconductor and display fab units. Meanwhile, Singapore-based IGSS Ventures has chosen Tamil Nadu to set up its Rs 25,000-crore semiconductor park. PC Soft