ISMC to construct $3 billion semiconductor chip factory in Karnataka’s electronics manufacturing cluster at Kochanahalli near Mysuru


The international semiconductor consortium ISMC announced today (May 1) that it will invest $3 billion (about Rs 23,000 crore) in Karnataka to set up a chip manufacturing plant.

ISMC Digital Fab, one of three applicants for the Union Government’s $10 billion Semiconductor Manufacturing Incentives, has signed an agreement with the Government of Karnataka to establish the first and largest unit of semiconductor manufacturing in India.

Additional Chief Secretary of IT Department, BT Dr EV Ramana Reddy and ISMC Director Ajay Jalan signed a Memorandum of Understanding in the presence of Chief Minister Basavaraj Bommai.

Welcoming the agreement, CM Bommai said, “This MoU is an important agreement amid competition among various states to attract semiconductor factories. Karnataka understands that it is not just tax incentives that matter, but the availability of a conducive ecosystem and overall ease of operations are also important. .”

ISMC said it will set up a 65nm analog fab in technology partnership with Israel-based Tower Semiconductors.

ISMC said the semiconductor manufacturing unit is expected to generate more than 1,500 direct jobs and 10,000 indirect jobs.

ISMC has sought 150 acres of land in Kochanahalli Industrial Zone in Mysuru District.

In September 2020, the government of Karnataka, in a bid to give an extra boost to the Electronic Systems Design and Manufacturing (ESDM) sector, announced a series of incentives. The announced incentives include a 25% grant on land only in areas other than the urban and rural districts of Bengaluru and a 20% grant on plant and machinery.

Incentives from the Government of Karnataka to attract investment in the ESDM sector.

Karnataka is home to over 300 export oriented manufacturing units. It is the largest chip design center in India, consisting of 85 fabless chip design houses and is the leading producer of aerospace and defense equipment in India.

Karnataka’s contribution to the national share stands at ~50% in electronics business and 40% in electronics design. Karnataka has huge companies like Qualcomm, Seimens, Wistron, Samsung, AT&S, AMD, NVIDIA, Intel, Cisco which are part of Karnataka’s ESDM ecosystem.

The Government of Karnataka had identified 2 major plots of land, namely Kochanahalli Industrial Zone in Mysuru District and Kotur – Belur Industrial Zone in Dharwad District for the establishment of the Electronic Manufacturing Cluster.

Located at a distance of 146 km from Bangalore, Mysuru has a significant presence of companies involved in the assembly, marking, testing and packaging (ATMP) of semiconductors. Among the leading companies in the field of semiconductors, including AT&S, Kaynes, etc.

Mysuru District has a state-of-the-art ISO 17025 2017 NABL Accredited Testing and Certification Center, “Lahiri”, which serves the testing, quality and regulatory needs of the regional electronics industry .

The Karnataka government is in the process of expanding the Kochanahalli Industrial Zone, located near the future Container Corporation of India (CONCOR) in Kadakola.

Kochanahalli is about 5 km from Mysuru Airport and is linked to industrial zones such as Kadakola, Adakanhalli, Thandya and Immavu which are already home to leading industries in various verticals.

    Kochanahalli Industrial Zone in Mysuru District.

Kochanahalli Industrial Zone in Mysuru District.

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