International semiconductor consortium ISMC will invest $3 billion (roughly Rs. 22,940 crore) in India’s southern Karnataka state to set up a chip-making plant, the state government said on Sunday.

ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor. US chip giant Intel has announced plans to acquire Tower.

India’s first semiconductor fabrication unit is expected to generate more than 1,500 direct jobs and 10,000 indirect jobs, the state’s investment promotion division said in a tweet.

ISMC and Indian conglomerate Vedanta have applied for Prime Minister Narendra Modi’s $10 billion (roughly Rs. 76,473 crore) incentive plan to push companies to set up semiconductor and display operations in India, the government’s next big bet on electronics manufacturing.

Vedanta told Reuters on Saturday it was in “advanced talks” with Gujarat and Maharashtra in west India and Telangana in the south to choose a site by mid-May. It has a planned investment outlay of $20 billion (roughly Rs. 1,52,973 crore) for its semiconductor and display push.

Modi and his IT ministers outlined plans on Friday for investment incentives in the sector, saying they want India to become a key player in a global chip market dominated by manufacturers in Taiwan and a few other countries.

India’s semiconductor market is forecast to grow to $63 billion (roughly Rs. 4,81,865) by 2026 from $15 billion (roughly Rs. 1,14,729) in 2020, the government says.

© Thomson Reuters 2022