Also in this letter:
■ Foxconn chairman to meet PM Modi in Nov for semiconductor talks
■ Govt programmes to address tech talent gap in 12-14 months: Chandrasekhar
■ Pepperfry to file draft IPO papers next quarter for 2023 listing
Cabinet approves flat 50% incentive for semiconductor firms
The Union Cabinet on Wednesday approved a uniform incentive of 50% of the project cost for setting up semiconductor, display and compound semiconductor fabrication units. Previously, the three schemes had an incentive range of 30-50%.
Driving the news: The 50% fiscal support to all three schemes was based on a unanimous recommendation by an advisory committee consisting of experts from around the world, the Ministry of Electronics and Information Technology said.
While incentives for setting up semiconductor fabrication were based on the size of the chip, for display fabrication and compound semiconductor fabs, the incentives were largely 30% of the total cost of the project.
“Given the niche technology and nature of compound semiconductors and advanced packaging, the modified programme shall also provide fiscal support of 50% of capital expenditure in pari-passu (equal footing) mode for setting up of compound semiconductors, silicon photonics, sensors and discrete semiconductors fabs,” the ministry said in a statement.
Harmonising incentives: The modifications in the scheme aim to harmonise the incentives for various categories, Minister of State for Electronics and IT, Rajeev Chandrasekhar, said.
When the government announced the scheme in December 2021, advanced nodes such as 28 nanometre (nm) stood to attract higher incentives than others, such as 65 nm.
The government, however, decided that a uniform incentive should be given to all schemes to ensure the presence of players in all segments, Chandrasekhar added.
There’s more: The Union Cabinet on Wednesday also removed the Rs 12,000 crore incentive limit for setting up display fabrication units and allowed firms that make semiconductor nodes above 65 nm to apply for incentives under the scheme.
A senior executive at ISMC Analog, one of the fab incentive applicants, told ET that the consortium had pushed for making the upfront incentive slab at 50% for all, “both verbally and in writing to ISM during our June meeting.”
Foxconn chairman to meet PM Modi in November for semiconductor talks
Foxconn’s chairman Young Liu is set to meet Prime Minister Narendra Modi in November as the Taiwanese giant looks to further its ambitious plans for semiconductor manufacturing in India, two people aware of Liu’s India plans told us.
Round two: His visit — the second in the past six months — comes even as the centre examines the Rs 1.54 lakh crore proposal by the Vedanta-Foxconn joint venture to manufacture semiconductors and display panels in India.
The Vedanta-Foxconn combine has committed to spend about $20 billion on its semiconductor factory, which is due to come up in Gujarat. It will supply chips for electronic gadgets like smartphones and also contain a display unit plant.
While affairs related to semiconductor manufacturing will top the agenda during Liu’s proposed visit in the second half of November, Vedanta is also expected to conduct the ground-breaking ceremony for the factory around the same time, sources said.
During his meeting with PM Modi in August, the Foxconn chief had discussed a slew of initiatives including semiconductors and electric vehicles, another strategic focus area for the Taiwanese contract manufacturer.
Competition: The other applicants to India’s Rs 76,000-crore incentive-backed semiconductor manufacturing scheme include Singapore’s IGSS Ventures and ISMC Analog, which is backed by Israeli technology partner Tower.
Origins: Foxconn, which set up manufacturing in India 16 years ago, started out making feature phone components for Nokia in 2006. Currently, it manufactures Apple phones out of one of its three manufacturing sites off Chennai, while its other entities make phones for other brands, including Xiaomi.
Govt programmes to address tech talent gap in 12-14 months: Chandrasekhar
The Centre is working with industry body Nasscom and academic institutions on specific programmes to address the skill shortage in the technology sector in the next 12-14 months, union minister of state for electronics and IT Rajeev Chandrasekhar told us on Wednesday.
These measures will include initiatives like digital university, dual certification and degrees aimed at upskilling and reskilling the available talent pool, he added.
“We are working with urgency to address the talent demand as it is an unprecedented opportunity for the startup and technology sector,” the minister told us in an exclusive interview.
Talent shortage: In recent weeks, Indian tech firms have raised concerns about rising attrition and increasing talent costs as the post-pandemic demand for digital transformation has led to higher demand for technology resources.
Industry-wide voluntary attrition levels have reached record high levels (over 20%) in the first quarter of financial year 2023 with the likes of Infosys and Tata Consultancy Services reporting attrition rates of 28.4% and 19.7%, respectively.
ETtech Done Deals
■ Gifting solutions company Join Ventures has raised $23.5 million (Rs 187 crore) in a funding round led by MO Alternate Investment Advisors, a subsidiary of financial services conglomerate Motilal Oswal Financial Services. Convivialité Ventures, global beverage player Pernod Ricard’s venture capital arm, and existing investors DSG Consumer Partners, Venture Catalysts, and ZNL Growth also participated in the round, the company said.
■ Speech technology startup Murf AI said it has raised $10 million in funding led by Matrix Partners India. Existing investor Elevation Capital, and prominent angel investors such as Ajay Arora, senior vice president, product, Disney Streaming; Ankit Bhati, cofounder of Ola; Ashwini Asokan, cofounder of Mad Street Den also participated.
■ Audio streaming startup Kuku FM said it has raised $21.8 million in funding led by Nandan Nilekani’s venture fund Fundamentum Partnership. Paramark Ventures also joined as a new investor in this round, in which existing investors such as Krafton Inc – the South Korean gaming giant – 3one4 Capital, and Vertex Ventures also participated.
Pepperfry to file draft IPO papers next quarter for 2023 listing
Omnichannel furniture seller Pepperfry is looking to file its draft initial public offering (IPO) papers with the Securities and Exchange Board of India (Sebi) between October and December, and aims to list on the stock exchanges next year, a person aware of the matter told us.
Catch up quick: The Goldman Sachs-backed startup postponed its IPO plans earlier this year due to changes in market sentiment, which triggered high volatility. At the start of the year, ET reported that Pepperfry was in talks to raise $250-$300 million through its public issue.
Financials: Meanwhile, Pepperfry – which is among the last few standalone online furniture platforms – reported over 22% growth in revenue from operations at almost Rs 247 crore in FY22. The startup saw its revenue drop by 10% in FY21 because of Covid-19. It earns revenue from the commissions it charges for sales on its platform.
The company recorded a gross merchandise value of Rs 1,185 crore in the same period. Its losses increased by 83% to Rs 194 crore in FY22.
YouTube offers creators new ways to make money
YouTube said it is expanding the platform’s monetisation system, the YouTube Partner Program (YPP), to allow more creators to join the programme. It is also introducing new ways for creators to earn revenue through Shorts, and opening up ads monetisation for those who feature music in their videos.
The company made these announcements at the inaugural Made on YouTube event and said these initiatives would allow its more than two million monetising creators to make money across formats on YouTube.
Threshold: Starting in early 2023, Shorts-focused creators can apply to YPP if they hit 1,000 subscribers and 10 million Shorts views over 90 days, the company said.
These new partners will enjoy all the benefits YPP offers, including ads monetisation across Shorts and long-form YouTube videos. This is another option to the existing criteria where long-form creators can still apply to YPP when they reach 1,000 subscribers and 4,000 watch hours. Creators can choose the option that best fits their channel.
Other Top Stories By Our Reporters
■ Investors sceptical about Zomato’s quick-commerce foray: Brokerage firm Jefferies has said that while investors are confident about Zomato’s competitive advantage in the food-delivery market they remain sceptical about its quick-commerce foray with the acquisition of Blinkit. It added that many investors questioned Blinkit’s existence, asking why someone would want groceries delivered in 10 minutes.
■ IVCA names Sequoia’s Rajan Anandan as new chair of its VC Council: The Indian Venture & Alternate Capital Association (IVCA), the apex body for the private equity and venture capital industry, said on Wednesday that it has formed a new eight-member venture capital (VC) council for the year 2022-2024 and that it had appointed Rajan Anandan, the managing director of Sequoia India and Southeast Asia, as its chair.
■ KPIT acquires Technica Engineering: KPIT Technologies said it was acquiring Munich-headquartered Technica Engineering to strengthen its capabilities in the software defined vehicles segment. KPIT will pay 80 million euros and a variable consideration of up to 30 million euros based on achievement of revenue and profit milestones to be payable over the next two-and-a-half years.
Global Picks We Are Reading
■ How TikTok became an ecommerce juggernaut in China (Rest of World)
https://restofworld.org/2022/tiktok-won-e-commerce-livestreaming-china/
■ Schneider Electric agrees £9.5bn buyout of UK software developer Aveva (FT)
https://www.ft.com/content/dd2bc82e-1027-481c-b4e9-0cb575153e39
■ These planes are battery operated. Will that fly? (The Washington Post)
https://www.washingtonpost.com/technology/2022/09/21/electric-plane-heart-aerospace-es-30/
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