Inox Air to invest Rs 500 cr on gas purification facilities for chip fabs

Fifty different and extremely pure gases are required for fabricating chips, of which only eight are available in raw form in India

Inox Air Products plans to invest Rs 300-500 crore to establish purification facilities and a supply chain for gases used by semiconductor fabrication facilities in India, according to a report by Mint. The firm is India's largest industrial gas producer.

Siddharth Jain, managing director of Inox Air Products, told Mint that the funds will be invested on a smaller scale this year and will be scaled up in the future in tandem with the demand generated by semiconductor fabrication companies planning to set up manufacturing units in India in the coming years.

Fifty distinct and highly pure gases are needed for fabricating chips. Of these, only eight are available in raw form in India. The remaining 42 are imported, along with the necessary infrastructure to transport and store all the gases. Jain mentioned that investments would be necessary, as India is attracting chipmakers like Micron to establish chip assembly, testing, monitoring, and packaging (ATMP) units and chip fabrication facilities locally. Inox Air Products is discussing with several chip fabrication and ATMP units evaluating their options in India.

 

Jain also said that Inox Air Products has begun investing in the purification of raw gases currently available in India—oxygen, nitrogen, argon, helium, nitrous oxide, methane, silane, and ammonia. These gases will be converted to ultra-high purity.

Regarding the additional capital expenditure required, Jain indicated that the investment would range between Rs 300 crore and Rs 500 crore if everything proceeds as planned. Inox Air Products had previously announced a Rs 3,000 crore capital expenditure plan for this year to build 10 manufacturing facilities by the financial year 2024-25 (FY25).

Jain stated that the first fabrication facility would have to rely on imported gases. While the company's initial investments would focus on supply chain development, infrastructure would continue to be imported, as the current volumes do not justify a greenfield investment in manufacturing these specialty gases.