India semiconductor ambitions

Indian Govt. Invites Proposal to Modernize SCL: Upto 100% Capital Support

The Government of India (GoI) is open to various structures, and both individual companies and consortiums or joint ventures can apply for this Preliminary Information Memorandum (PIM).
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Introduction :

The Government of India (GoI) is seeking expressions of interest from commercial or technology entities possessing the required technological and operational proficiency to modernize SCL. The modernization effort will follow one or a combination of two overarching approaches:

Modernization Approach 1: Conversion of SCL into a Research and Development (R&D)-driven Center of Excellence, emphasizing semiconductor R&D capabilities spanning advanced nodes, advanced packaging, compound semiconductors, design and Electronic Design Automation (EDA) tools, materials, and other related research areas.

Modernization Approach 2: Conversion of SCL into a manufacturing entity capable of large-scale production of semiconductor devices/chips.

Lets find out the details of the Proposals.

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About Semi-Conductor Laboratory (SCL)

SCL, an autonomous society under the Ministry of Electronics and Information Technology (MeitY), boasts over 40 years of experience as a Semiconductor Integrated Device Manufacturer (IDM). The institution presently manages two wafer fabrication lines: an 8″ CMOS line at the 180 nm node and a 6″ MEMS line, with a combined capacity of approximately 750 Wafer Starts Per Month (WSPM). SCL engages in various activities encompassing the design, fabrication, assembly, packaging, testing, and quality assurance of silicon CMOS and MEMS devices for diverse applications. Furthermore, SCL operates a research facility dedicated to compound semiconductors.

It is envisioned that leveraging its extensive industrial expertise and a modernization plan, SCL can significantly enhance its role within the Indian semiconductor ecosystem.

Post-modernization, SCL will continue to cater to specific demands from Indian government buyers, including various research agencies, as it presently does. This Preliminary Information Memorandum (PIM) inviting Expression of Interest (EoI) is being issued to various Indian and global entities with the requisite technological and operational expertise in semiconductor R&D and/or semiconductor manufacturing to collaborate with SCL on this transformative journey and submit their proposals for SCL’s modernization in alignment with the aforementioned context.

Read More: What is SCL, India’s only Fab

Partnership model(s) for the proposed engagement to modernize SCL

Modernization Path 1: R&D-Focused Center of Excellence

The chosen applicant will undertake the construction of the new fab and handle its operations and maintenance for a duration specified by MeitY. While not obligatory, at the discretion of MeitY, the applicant may have the opportunity to utilize the proposed new fab for their own or their customers’/partners’ R&D/prototyping initiatives. Such projects should entail collaboration with SCL staff and/or domestic industry/academia. The applicant is also expected to submit a commercial proposal for this utilization, outlining either grants/fees payable to SCL or a joint responsibility for sharing operational expenses for the proposed project(s).

The Government of India may provide 100% capital expenditure support towards the overall project cost for setting up the new R&D line.

Modernization Path 2: At-Scale Manufacturing-Focused Entity to modernize SCL

The applicant(s) should consider one of the partnership models outlined below for establishing and operating the at-scale manufacturing-focused entity:

Multi-Entity Joint Venture (JV) Model to modernize SCL

  • The Government of India (GoI) is offering to provide 50% capital support for the overall project cost of the resulting JV on a pari-passu basis.
  • GoI is also offering to grant majority equity stake and complete operational autonomy to the applicant(s) in the resulting JV.
  • The applicant(s) will bear complete responsibility for bringing in the required technology, upgrading existing facilities, establishing new facilities, stabilization, revenue generation/sales, and operations & maintenance of the resulting JV in a self-sustaining manner.

Build, Operate, and Maintain Model to modernize SCL

  • GoI is offering 100% capital infusion for the modernization of SCL and will retain 100% ownership of the resulting entity.
  • The applicant(s) will build, operate, and maintain the resulting entity on a fixed income and/or profit-sharing basis for a minimum period of 15 years, extendable at GoI’s discretion.
  • The applicant(s) will be entirely responsible for bringing in the necessary technology, upgrading existing facilities, establishing new facilities, stabilization, and operations & maintenance of the resulting entity in a self-sustaining manner.
  • The primary responsibility for the applicant(s) will be revenue generation and sales for the products manufactured at the resulting entity. GoI may extend support as needed.

Criteria for Application to modernize SCL

  • The Government of India (GoI) is open to various structures, and both individual companies and consortiums or joint ventures can apply for this Preliminary Information Memorandum (PIM).
  • Any entity incorporated in India under the Companies Act, 1956/ Companies Act, 2013, or a Partnership Firm registered under the Indian Partnership Act, 1932, or a Limited Liability Partnership (LLP) under LLP Act, 2008, and subsequent amendments, or registered with the Service Tax and GSTN Authorities in India, or a company incorporated outside India eligible to invest in India under Indian laws (subject to obtaining all required statutory approvals from GoI/FIFP/RBI, etc.) can apply either as an individual applicant, lead applicant in a consortium, or consortium members in this PIM.

Financial & Technical Requirements

  • Applicant(s) intending to engage in silicon semiconductor chip fabrication should have a minimum revenue of INR 7,500 Crore (including group companies) in any of the 3 Financial Years preceding the year of submission. In the case of a consortium, the lead bidder must individually meet the minimum revenue threshold.
  • The minimum capital investment for proposed compound semiconductor fabrication must be INR 100 Crore, and for assembly, testing, and packaging, it must be INR 50 Crore.
  • Applicant(s) must have the minimum capital availability to hold a majority equity stake, i.e., more than or equal to 51%, in the resulting JV.
  • In the case of a consortium, while not mandatory, it is advisable for the global semiconductor technology player to have an equity stake in the resulting JV.
  • For Modernization Path 1 (R&D-focused Center of Excellence), the applicant, when submitting this proposal, must have ownership of R&D/prototyping grade developed/licensed technology and must make all necessary arrangements for the transfer of such technology to SCL. The applicant should also demonstrate experience in setting up and operating R&D-cum-prototyping facilities for mature/leading/advanced technology nodes for a minimum of 3 years and/or have prior experience in executing at least 1 similar project where the applicant helped set up a similar R&D line/cleanroom setup fully or partly for another university, research organization, or industry player.
  • For Modernization Path 2 (At-scale manufacturing entity), the applicant(s) must either own or have access to production-grade developed/licensed technology to be used for the modernization of SCL in line with the proposal submitted as a response to this PIM.

For details, Please read the PRELIMINARY INFORMATION MEMORANDUM (PIM)

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