NEW DELHI: Debt-laden infrastructure company JP Associates has pulled out of a project to set up an electronic chip plant in Uttar Pradesh that would have entailed an investment of about Rs 34,000 crore.
“JP Associates has withdrawn its proposal of setting up a semiconductor plant. They have said that it is not commercially viable to set up this plant at present,” Aruna Sharma, secretary, DeitY (Department of Electronics and IT) said on the sidelines of a Qualcomm event.
The plant was one of the two approved by the Union Cabinet in February 2014.
The debt-ridden firm had partnered with IBM and Israel’s Tower Semiconductor for setting up the plant. The project, estimated to cost Rs 34,399 crore was to be located along the Yamuna Expressway in Uttar Pradesh.
Sharma said that other firm that got approval from the Cabinet, Hindustan Semiconductors, is still working on the project, while adding that the government has received other investment proposals in the semiconductor manufacturing sector which are to be announced soon.
Electronic chips are critical component of any modern electronic device and also have security implications. At present there are no semiconductor plants in India.
The Government had approved the semiconductor plant due to both commercial and more importantly strategic reasons.
On March 31, in one of the biggest deals in the domestic cement industry, debt-ridden Jaypee Group had announced part sale of its cement business to Kumarmangalam Birla-led Ultratech for Rs 15,900 crore.