HCL Group considers $300M entry into India’s semiconductor space

HCL Group considers $300M entry into India's semiconductor space

HCL Group Considers Entry into India’s Semiconductor Space

In a recent report by the Economic Times on July 19, it has come to light that the HCL Group is actively considering venturing into India’s rapidly expanding semiconductor space.

The conglomerate is poised to submit a proposal to the government for the establishment of an assembly, testing, marking, and packaging (ATMP) facility for semiconductors. Sources indicate that the project’s estimated value falls within the range of $200 to $300 million. Notably, this ambitious endeavor is being led by the HCL Group and not its IT exports wing, HCL Tech, which boasts an impressive $12.6 billion in revenues.

To facilitate its entry into the semiconductor space, HCL is expected to apply for standard operating procedures (SOPs) under the $10-billion semiconductor incentive program. This program offers subsidies, covering up to 75 percent of the capital expenditure incurred by companies setting up semiconductor facilities in India, and is aimed at fostering the growth of this crucial industry.

This move comes hot on the heels of Micron’s recent announcement in July, wherein they revealed their plans to establish a $825-million Outsourced Assembly and Test (OSAT) facility in Gujarat. The entire project, done in collaboration with the government, involves an impressive cumulative investment of $2.75 billion. Micron’s initiative is set to significantly boost India’s chipmaking capabilities.

India’s semiconductor sector has been witnessing remarkable growth over the past few years, with the government’s ambitious Semicon India Programme, launched under the India Semiconductor Mission (ISM) in December 2021, playing a pivotal role. The program, with a financial outlay of Rs 76,000 crore, aims to develop a robust semiconductor and display manufacturing ecosystem within the country. In September 2022, it was rebranded as the ‘Modified Semicon India Programme’ based on industry feedback, further enhancing its competitiveness.

This decision by HCL Group to enter the semiconductor manufacturing space is perceived as a strategic move to expand organically, given its existing relationships with major chipmakers like Intel. Reports from last November suggested that the company was exploring a stake in ISMC Analog, a semiconductor wafer fab applicant planning a $3 billion facility near Karnataka’s Mysuru.

With the ongoing trade tensions between the US and China, as well as the disruptions in the global semiconductor supply chain, this move by HCL Group represents an opportune time for India to solidify its position in the chipmaking industry. Furthermore, global chip manufacturers are increasingly turning their attention towards India as the next promising destination for setting up their manufacturing units.

HCL already enjoys a strong presence in the semiconductor space, providing essential services such as lithography, etching, Ion implant, assembly, packaging, and testing on a global scale.

As India’s semiconductor dream continues to take shape, this potential foray by HCL Group adds yet another exciting chapter to the nation’s burgeoning semiconductor industry.

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