The Union Cabinet is likely to take up a proposal to set up semiconductor mission in the country with an outlay of `76,000 crore. This will be an umbrella mission under which the government will offer incentives to companies for manufacturing semiconductor devices.The incentive structure under the mission will be finalised by ministry of electronics and IT (MeitY) after Cabinet approves it. The government is aiming to lay the foundation of the country’s first semiconductor manufacturing plant by June-July next year and a request for proposal (RFP) will soon be issued seeking commercial bids from companies. The government is moving fast to make the country self-reliant in semiconductors, given the fact there is a big shortage currently going in the world regarding supply of chips. Most of the countries including US are wooing the big semiconductor players to set up their manufacturing units. US, for instance, has already declared that Samsung and Taiwan Semiconductor Manufacturing Company (TSMC), will be setting their manufacturing units in the country.
MeitY in December last year came out with an expression of interest (EoI) for setting up semiconductor fabs in India and around 15-20 firms have shown interest to participate. The idea to have local manufacturing of chips is further strengthened by the ongoing chip shortage globally and government has decided to give full support to the industry for setting up chip manufacturing units in the country.
“The semiconductor dream of India will be fulfilled soon. It’s a dream of Prime Minister to have semiconductors designed and made in India. We are working on developing the complete semiconductor ecosystem –for designing, manufacturing and packaging semiconductor chips,” minister of electronics and IT Ashwini Vaishnaw had told Financial Express.
The electronics industry is the world’s fastest growing industry with applications in all sectors of the economy. “Semiconductors have been a key enabler in the advancement of electronics for the past 50 years and will continue to play an even greater role with the introduction of new technologies and applications including internet of things, artificial intelligence, 5G, smart cars, smart factories, date centers, robotics etc,” MeitY said in the EoI for semiconductors.
Semiconductor manufacturing is a complex and research-intensive sector, which requires significant and sustained investments. Semiconductors constitute a significant part of the total value of bill of material (BOM).
As the earlier plan of setting up semiconductor fabs failed, the government this time is ensuring that any incentive scheme should be able to address the requirements of the industry.As setting up semiconductor plants requires billions of dollars of investment, the government support should also match the investments.
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