According to people familiar with the matter, India will renew its efforts to attract potential chip manufacturers to enter the country, planning to restart the application process of 10 billion US dollars in incentives and aid, aimed at encouraging local chip manufacturing. The government initially gave companies only 45 days to submit applications.

India now plans to allow companies to apply again and will accept applications until its budgeted $10 billion in incentives is exhausted, the people said.

Any chip project, including Vedanta, must detail whether it has firm, binding agreements with production technology partners and financing plans including equity and debt arrangements, the report said. Applicants also need to describe the type of semiconductor they will produce in the future and their target customers. To get 50% state support, companies need to make chips using relatively complex 28nm or more advanced technology.

In a statement, Vedanta chief executive David Reed said the project was "on track" with the joint venture set to break ground on a site in the fourth quarter of this year and be profitable in the first half of 2027. His partner's parent company, Hon Hai Precision Industry Co., has acquired "production-grade, high-volume 40nm technology" and "development-grade 28nm technology" for the joint venture, without disclosing the source of the technology.

Separately, plans to invest $3 billion in a manufacturing plant in the southern state of Karnataka have stalled as Intel Corp. struggles to complete its takeover of Hightower Semiconductor.

In recent years, due to the strategic need of developing the economy and stabilizing the supply chain, India has been vigorously deploying and developing the semiconductor industry. In addition to an incentive plan worth US$10 billion approved in 2021, a production incentive plan with an investment of 760 billion rupees (about 62.6 billion yuan) was announced in 2022. The goal is to ensure that there will be no sudden shortage of chips needed in India in the next 3 to 5 years, and avoid a sharp rise in chip prices in various fields of electronic products, automobiles, and high-tech products due to shortages.

Chip consumption in India is on the rise as electronics manufacturers move assembly operations to the country to reduce reliance on China. According to Counterpoint Research, India's chip market will reach about $64 billion in 2026, three times as much as in 2019.

For the olive branch extended by the Indian government, not only Indian local manufacturing companies shown strong interest but also attracted many foreign companies to invest and build factories.

It was previously reported that Sahasra Semiconductors, a local Indian company, has invested 7.5 billion rupees to build a memory chip factory.

In terms of foreign-funded enterprises, Hon Hai Group and Vedanta have cooperated to build a 28-nanometer 12-inch wafer factory, which is expected to be put into operation in 2025, with an initial monthly production capacity of 40,000 pieces; the international semiconductor consortium ISMC plans to invest 3 billion US dollars to establish a wafer factory in India. Plans to produce 65nm logic chips; Singaporean investment group IGSS also plans to invest $3.25 billion in a fab in Tamil Nadu, India.

In addition, Huang Chongren, chairman of PSMC, also confirmed at the beginning of this year that he signed a cooperation agreement with the Indian government to assist in the establishment of a semiconductor fab in the local area. After the hydropower is completed, the two parties will sign a cooperation agreement.