The HCL Group, led by Shiv Nadar and known for its computer hardware manufacturing, is making plans to enter the rapidly evolving semiconductor industry. According to a report by The Economic Times, HCL is nearing the submission of a proposal to the Indian government to establish an assembly, testing, marking, and packaging (ATMP) unit for semiconductors. The estimated cost of this venture is expected to range between $200 million and $300 million. Read More Business News on our website.
OSAT or ATMP units play a crucial role in the semiconductor manufacturing process by conducting testing and packaging of silicon chips. HCL Group officials stated that they evaluate investment opportunities and share updates when appropriate. To receive incentives under the India Semiconductor Mission, the company will need to submit a business plan or model to the government. Additionally, HCL will have to form a partnership with a firm whose chips will be packaged at their unit.
It is important to note that this foray into the semiconductor industry is being driven by the HCL Group itself and not directly by HCLTech, the group’s IT exports arm. Foxconn recently canceled its chip-making venture with Vedanta, which would have marked India’s official entry into semiconductor manufacturing.
The report by The Economic Times also mentioned that the HCL Group intends to apply for incentives under the $10 billion semiconductor incentive program. This program provides central and state subsidies of up to 75% of the capital expenditure incurred by companies establishing chip manufacturing units in the country.
Furthermore, officials emphasized the strategic nature of HCL’s move, highlighting the company’s existing global service to chip makers like Intel as a software services firm. They also mentioned HCL’s previous interest in acquiring a stake in one of the semiconductor wafer fab applicants, ISMC Analog. One of the officials stated that since no progress has been made on the Intel-Tower front, HCL plans to proceed independently and apply for an ATMP unit.