International semiconductor consortium ISMC will spend $3 billion on a chip-making plant In Karnataka instead of China

The state administration of India’s southern Karnataka state announced on Sunday that the international semiconductor consortium ISMC will spend $3 billion on a chip-making plant there.

ISMC is a joint venture between Next Orbit Ventures in Abu Dhabi and Tower Semiconductor in Israel. Intel Corp (INTC.O), the world’s largest chipmaker, has announced plans to buy Tower.

According to the state’s investment promotion office, India’s first semiconductor fabrication unit is estimated to create more than 1,500 direct jobs and 10,000 indirect jobs.

ISMC and Vedanta Ltd (VDAN.NS), an Indian conglomerate, have applied for Prime Minister Narendra Modi’s $10 billion incentive scheme to encourage companies to establish semiconductor and display operations in India, the government’s next big bet on electronics manufacturing.

On Saturday, Vedanta told Reuters it was in “advanced talks” with Gujarat and Maharashtra in western India, as well as Telangana in the south, to select a location by mid-May. It plans to invest $20 billion in its semiconductor and display initiatives.

On Friday, Modi and his IT ministers unveiled proposals for investment incentives in the sector, stating that they want India to become a major player in a global chip market controlled by Taiwanese and a few other countries.

According to the government, India’s semiconductor market would expand to $63 billion by 2026, up from $15 billion in 2020.