The cabinet approved a semiconductor incentive plan of 76,000 rupees on Wednesday. According to the plan, India will establish more than 20 semiconductor design, component manufacturing and display manufacturing (fab) departments in the next six years. This is part of the Modi government’s efforts to make the country a hub for electronics products. The nod was made almost a year after the government sought company’s interest.
The Ministry of Electronics and Information Technology (MeitY) will now develop minute details and invite applications. A senior government official told before approval that the new semiconductor policy will help deepen India’s manufacturing base. The plan was named “Semiconductor and Display Manufacturing Ecosystem Development Plan.”
As part of this plan, in addition to large companies, the government will also seek to incentivize start-up companies to design and manufacture semiconductors. According to media reports, an investment worth 1.7 lakh crores is expected to be realized.
According to Ashwini Vaishnaw, Minister of Telecommunications and IT, the plan envisages training 85,000 semiconductor engineers to make it a complete C to S (chip to start-up company) ecosystem (including design, manufacturing, testing, and packaging). He also elaborated on a new design-related incentive (DLI) in which 50% of the cost will be borne by the government. The government’s current goals include 1 to 2 fab units for displays, and 10 units each for design and production components.
According to Reuters, citing government sources, Israel’s Tower Semiconductor, Apple’s contract manufacturer Foxconn and a Singapore-based consortium have all expressed interest in establishing a semiconductor unit here. Vedanta Group also expressed similar interest some time ago.
Vaishnaw said at a briefing after approval that it may have a huge transformative power, and the entire plan will create 35,000 high-quality jobs and indirect jobs for 1,00,000 people.
The global industry is currently being affected by a severe shortage of semiconductor chips, which has caused the global production process to run out of control and prices soared.
Semiconductor chips are used to manufacture everything from automobiles to mobile phones. Recently, due to a variety of reasons, their supply has been severely interrupted, leading to crises in many industries, including automobiles and gadgets. In addition, many other daily necessities, such as TVs, laptops, and even washing machines, require semiconductors.
The fabs of companies such as TSMC (also known as foundries) design and produce semiconductor wafers to meet the needs of global chip manufacturing giants such as Samsung and Qualcomm. Since then, these chip manufacturers have tested, packaged and sold the chips to small tool manufacturers such as Cisco Systems and Xiaomi.
