Invest in semiconductor manufacturing in TN: Stalin to Samsung

After having identified semiconductor manufacturing as one of the “sunrise sectors” of the state, Chief Minister M K Stalin on Tuesday invited global electronics major Samsung to set up a plant that produces semiconductors in Tamil Nadu, which already accounts for 20 per cent of national production in electronics and hardware.

Samsung is the third company that the Tamil Nadu government has invited to set up a fab manufacturing unit in the state after homegrown Tata Group, and Taiwan’s Foxconn. Tamil Nadu feels it is in an “advantageous position” in attracting investments in the semiconductor space given the market it offers in the automobile and electronics sectors – several giants have productions units here – which are in need of computer chips.

The state has approached interested firms to take advantage of the Centre’s Rs 76,000-crore product-linked incentive (PLI) scheme for semiconductor manufacturing in India and set up units in Tamil Nadu. Stalin himself invited Foxconn to invest in the sector when the company’s management called on him in January this year.

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“I believe you know our goal is to make Tamil Nadu a $1 trillion economy by 2030. As part of this initiative, I request Samsung to expand its facilities in Tamil Nadu. I would like to request Samsung to set up a semiconductor manufacturing unit in the state. The state government will extend all possible help in this regard,” Stalin said.

He made the request in the presence of Ken Kang, President and CEO, Samsung Southwest Asia, after the South Korean firm signed an MoU with the Tamil Nadu government for setting up a compressor manufacturing unit for refrigerators in Sriperumbudur near here at a cost of Rs 1,588 crore.

Industries Minister Thangam Thennarasu had told DH in an interview in January that the state has touched base with several companies to produce chips in the state. “Since Foxconn is a major electronics manufacturer, we have formally invited them to invest in semi-conductor sector. The company has been doing business here for over a decade and they know the state well,” Thenarasu had said.

Besides the PLI scheme and TN’s incentives, the state government believes that the skilled workforce and the ecosystem, given Tamil Nadu has over 8.5 lakh MSMEs, would go in the state’s favour when the companies finally come to a decision.

Sources said the state is in talks with Tata Group, which had in August 2021 announced its intention to enter the sector. It is believed that the state government has proposed Coimbatore for the Tata Group to set up their first semiconductor fabrication unit. However, no agreement has been reached so far as several states are said to be in competition.

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Tamil Nadu, which released an exclusive policy for electronics and hardware manufacturing in 2020, aims to contribute 25 per cent of India’s total electronic exports to the world and increase the industry's output to $100 billion by 2025.

K E Raghunathan, convenor of the Consortium of Indian Associations (CIA), said the Tamil Nadu government should flaunt the “assured market” for the semiconductor industry while reaching out to the companies, besides promising capital subsidy and assurance of huge availability of water, which is needed in abundance for the manufacturers.

“Tamil Nadu has a clear edge because the state is not just an automobile hub but is also fast emerging as the electric scooter hub of the country. Since many automobile and electronic majors have manufacturing units in TN, the state offers the best market for them. Tamil Nadu has such inherent advantages which no other state can boast of,” he told DH.

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