Taiwanese fab major PSMC looking to set up semiconductor plant in India

PSMC is one among several global fab companies interested in taking advantage of the government's incentives to set up semiconductor units in the country.

Powerchip Semiconductor Manufacturing Corporation (PSMC), the third largest fab company in Taiwan, is exploring the opportunity to come to India. According to sources, it has had some preliminary discussions with Indian companies for a possible tie-up.

The move is significant as there is a growing interest on the part of global fab companies in the government’s recently announced semiconductor policy, which has promised attractive financial incentives for them to set up at least two fab plants in the country.

PSMC’s executive vice-president in the president’s office, Martin Chu, is in India as part of a Taiwanese delegation led by government officials. However, Chu did not respond to an email on PSMC’s plans for India.

According to data from TrendForce, which tracks the industry, PSMC had a 2 per cent share of the $107 billion global foundry market in 2021. It is, of course, a much smaller player than the global behemoth TSMC, which commands 53 per cent of the global foundry market, followed by UMC, which accounts for 7 per cent. The other Taiwanese foundry player is VIS.

Together, Taiwan controls over 64 per cent of the global foundry market.

PSMC owns two eight-inches and three 12-inches fab plants with 6,900 employees, according to its website.  And a large part of its sales are in the domestic market, followed by Asia.

  

India’s semiconductor incentive scheme has already attracted three players, which have given proposals for setting up fab plants in the country. These include Vedanta along with Taiwanese contract manufacturer Foxconn, ISMC, a consortium-led by India-based investment company Next Orbit, which has a tie-up with Tower Corporation Israel, and Singapore-based IGSS which has IMEC ( xxx)  as its technical licensing partner.  

The government has offered to provide 50 per cent of the investment cost of setting up a fab plant and has earmarked $10 billion for incentives to boost the semiconductor industry.

        

Apart from meetings with government officials and attending presentations on India’s semiconductor policy, the Taiwanese delegation is likely to visit the semiconductor research institute SCL, and also the Dholera smart city in Gujarat, and have meetings with state government officials. They are also expected to have meetings with top executives of the Tata Group and the JSW Group in Mumbai.

The government has been positioning India as a multi-dimensional market -- for domestic consumption as well as for exports -- for semiconductor units wanting to set up shop in India. Officials at the ministry of electronics and information technology (Meity) say that they are not competing with other countries which have offered large incentives packages (the US is offering packages worth $53 billion).

However, they emphasise that India is the fastest growing market for electronics, and that digital consumption will go up exponentially because 1.2 billion people will soon be connected online. Besides, vast parts of the economy and the social services are getting digitised, which will create downstream demand for digital products. Moreover, the country is also emerging as a trusted source in the global value chain of electronics, the officials say.