Dr. Jitendra Singh visited the Chandigarh based Semi Conductor Laboratory (SCL) of the Department of Space
NEW DELHI: The government is set to give the two consortia selected to set up semiconductor wafer plants a four-month deadline to raise funds and show their ability to handle the critical project which is the first step towards indigenous electronics production.
The fabrication plants are the cornerstone of the Make in India plan for strategic electronics that will involve the defence, space and cyber security sectors, besides meeting the massive demand of the civil sector.
While the two consortia - led by HSMC Technologies India and Jaiprakash AssociatesBSE 10.57 % - had been identified by the previous UPA government to set up the fabrications plants, they have failed convince officials on their ability to raise the heavy investments needed to set up shop. By conservative estimates, the cost would exceed Rs 60,000 crore.
The government is set to give both companies a four-month deadline starting late November to show an investments of at least Rs 1,000 crore or face cancellation of the entire project, people with knowledge of the matter said.
"There is no confidence on the ability of either company to raise funds for a very capital intensive project. We are being left with no option but to give them a final deadline or deal with cancellation," a senior government functionary told ET.
Sources said the government is aware that starting the process of selecting fresh companies for the fabrication project is cumbersome and could take up to two years, but there is little choice left as both selected companies have been struggling to put the project together.
While the two companies had submitted the project reports for the setting up of plants, several red flags were raised by a high level panel formed by the NDA government to look into the matter.
In the absence of the fabrication plants, plans to vitalise the electronics manufacturing sector in India will not take off. The units were to produce chips, the basic building material of all electronics products from mobile phones to complicated defence systems.
As reported by ET, India has been considering a proposal to make it mandatory for the strategic sectors of Defence, Space and Atomic Energy to use 'made in India' chips in an initiative that will meet not only national security needs but also take care of concerns of the fabrication units about the demand for their products.
