Bengaluru: International semiconductor consortium ISMC said on Sunday that it would invest $3 billion in a semiconductor chip-making plant in Karnataka.
This has given the southern state the lead in cornering investments under the Union government’s $10-billion incentive scheme for semiconductor companies.
ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor.
The JV said it would invest in a 65-nanometre analogue semiconductor fabrication plant in Mysuru. US-based chipmaker Intel is buying out Tower in a $5.4 billion deal.
ISMC has sought 150 acres at Kochanahalli industrial area in Mysuru.
The project is expected to generate about 1,500 direct jobs.
The government said it would also create about 10,000 indirect job opportunities and kick off an ancillary semiconductor ecosystem.
ET was the first to report on April 25 that Karnataka was close to pipping Gujarat in inking a deal with the consortium for a semiconductor plant.
Chief Minister Basavaraj Bommai, who said last month that Karnataka would get a semiconductor plant soon, was present as ISMC director Ajay Jalan signed the memorandum of understanding with EV Ramana Reddy, the additional chief secretary, industries and IT/BT departments, in Bengaluru on Sunday.
The unit will be one the first and largest semiconductor fabrication units in the country under the Indian Semiconductor Mission project. The chip consortium will set up the Mysuru plant over the next seven years.
Bommai said Karnataka was leading the march in the semiconductor mission that Prime Minister Narendra Modi had launched.
The partnership with ISMC, he said, would make Karnataka the frontrunner in semiconductor manufacturing.
His state, the chief minister said, clinched the deal while many others were competing for investments in the semiconductor fab sector.
Karnataka understands that it is not only incentives or concessions, but also a conducive ecosystem that will attract investors, he added.
The project will put Karnataka on the world's semiconductor map, said CN Ashwath Narayan, deputy chief minister and minister of IT/BT.
Two other players — the Vedanta-Foxconn joint venture and Singapore-based IGSS —have also bid for incentives to set up semiconductor and display units in India.