"Inox Air to Invest ₹500 Crore in Gas Purification Facilities for Chip Fabs"

Inox Air Products, India's largest industrial gas producer, is planning to make a substantial investment of Rs. 300-500 crore to establish purification facilities and a robust supply chain for gases essential in semiconductor fabrication, as reported by Mint. This strategic move comes as India continues to attract semiconductor fabrication companies looking to establish manufacturing units within the country.

Siddharth Jain, Managing Director of Inox Air Products, explained that the investment would commence on a smaller scale this year and would be expanded in the future in accordance with the growing demand from semiconductor fabrication companies intending to set up operations in India in the coming years.

Semiconductor fabrication relies on approximately fifty distinct and highly pure gases, of which only eight are available in raw form within India. The remaining 42 gases are imported, along with the necessary infrastructure for their transportation and storage. Jain highlighted the necessity of these investments as India emerges as a preferred destination for chipmakers like Micron, who are establishing chip assembly, testing, monitoring, and packaging (ATMP) units and chip fabrication facilities within the country. Inox Air Products is currently in discussions with various chip fabrication and ATMP units, exploring their options for investments in India.

Jain also disclosed that Inox Air Products has initiated investments in the purification of existing raw gases available in India, including oxygen, nitrogen, argon, helium, nitrous oxide, methane, silane, and ammonia. These gases will be upgraded to ultra-high purity standards.

Regarding the projected capital expenditure, Jain indicated that the investment could range between Rs. 300 crore and Rs. 500 crore, provided that the plans progress as anticipated. Inox Air Products had previously announced a capital expenditure plan of Rs. 3,000 crore for the current year, with the goal of constructing ten manufacturing facilities by the financial year 2024-25 (FY25).

Jain acknowledged that the first semiconductor fabrication facility in India would initially depend on imported gases. While the company's initial investments would concentrate on supply chain development, the infrastructure for these specialty gases would continue to be imported, as the current demand volume does not warrant a greenfield investment in domestic manufacturing.

BS