TN govt proposes semiconductor mission with 500 crore capex

Team TOITamil Nadu govt's proposed semiconductor mission with 500 crore capex could create a domestic ecosystem in equipment making and help chip designing startups to scale up business. Govt plans to establish a semiconductor fabless lab in Chennai at a cost of 100 crore to attract design companies and startups. This initiative would help startups scale up their business and get into volume production, said G S Madhusudan, co-founder and CEO of Incore semiconductor, Chennai-based processor design startup. The chip product design startups are in a very nascent stage in the country and Tamil Nadu can attract players, he added. "It is not always about money. For instance, quality testing a chip is difficult." Madhusudan said the state has captive consumers of chips, large automobile and electronics original equipment makers, which could be an added advantage. Tamil Nadu also plans semiconductor equipment manufacturing parks in Sulur and near Palladam, both spanning 100 acres. Raja Manickam, founder and CEO of iVP Semiconductor and industry veteran, said, "The equipment makers require thousands of parts to be put together. Usually the final equipment maker is an integrator of all the parts that is sourced from MSMEs. So large equipment makers will be able to use the thousands of companies in the Coimbatore area." Sri Thirunavukkarasu, founder and CEO of Singapore-based Mindox Techno, which makes chip equipment, said due to geopolitical reasons, global companies are planning to shift from China, Taiwan and Europe and this provides opportunities for Tamil Nadu. "The supply chain is already there and it is easy to train, instead of creating everything from the ground up. Fabrication players do not want to establish facilities without an equipment ecosystem," he added. State industries secretary V Arun Roy said that the govt is in talks with at least three strategic companies from US, Malaysia and Taiwan. "Yield Engineering Systems, maker of manufacturing processing equipment, which signed a MoU with the govt, has already started the production. We are exploring viability gap funding, among other things and will come up with the detailed guidelines in 45 days," he said.