VC wants to reboot Indian wafer fab plans

August 22, 2017 //By Peter Clarke
Mumbai-based venture capital firm Next Orbit Ventures plans to help finance three wafer fabs in India with one each focused on digital, analog and solar cell production.

The initiative, with the Next Orbit Ventures Fund II to back it, could provide the missing element that has prevented previous plans from producing results – cash. The initiative comes at the same time that the unsuccessful Indian government efforts to attract chip companies to put down wafer fabs in the sub-continent are to be ramped up, according to a report in The Hindu.

The Indian newspaper reports that Minister for Electronics and IT, Ravi Shankar Prasad, has instructed the IT Secretary Ajay Prakash Sawhney to work on a "war footing" with the aim of creating a semiconductor fab in India.

However, there are risks that Next Orbit Ventures could run into the same bureaucratic quagmire that bedevilled previous efforts. Regional governments have been slow to provide answers to questions on such things as the provision of land, water, electricity and financial subsidies.

What is known is that the Next Orbit Ventures Fund II will lead investment into digital, analog and solar Fab with complementary investments in design and electronic manufacturing services companies and downstream investments in electronic equipment products to make use of the chips produced. NOVF II is described as a "daughter fund" under an Indian government electronics development fund scheme and when first announced in 2015 had a target size of $750 million.

However, Ajay Jalan, founder and managing partner of Next Orbit Ventures, has been quoted saying that the budget for the three wafer fabs – analog, digital and solar – would be about $10 billion in total.

Next Orbit Ventures was asked to submit its proposal to the Ministry of Electronics and Information Technology (MeitY) at the end of December 2016 and has signed memoranda of understanding with the state governments of Andhra Pradesh and Gujurat.

It remains unclear whether Next Orbit Ventures can resuscitate existing plans for wafer fabs or will be starting afresh.

Next: Confident of cash