Budget 2024: Govt eyeing Si-based CMOS Fab manufacturing with Rs 6,903 crore allocation
The allocated amount, which is expected to help in the development of semiconductors and display manufacturing ecosystems, is being hailed by the industry.
- Feb 1, 2024,
- Updated Feb 1, 2024 1:58 PM IST
After announcing Rs 76,000 crore incentive for semiconductor and display fabs back in December 2021, the government has now allocated Rs 6,903 crore in interim budget 2024-25. This follows the non-planned allocation of Rs 3,000 crore in the Union Budget 2023-24. The allocated amount, which is expected to help in the development of semiconductors and display manufacturing ecosystems, is being hailed by the industry.
“The high priority allocated in Union Budget 2024 to the Programme for Development of Semiconductor and Display manufacturing ecosystem in India is commendable – we from the semiconductor industry has long awaited such formidable and bold semiconductor commitments from India,” says Danish Faruqui, CEO of Fab Economics, a US based boutique semiconductor ecosystem consultancy with broad macroeconomics capabilities.
In 2023-24, the Budget allocated Rs 3,000 crores for the Semiconductors and Display manufacturing incentive schemes and at that point of time, India’s positioning was more towards lower cost semiconductor manufacturing and lesser expectation on higher (an order of magnitude higher) cost Si based CMOS Fab. In the 2023-24 Budget allocation, Rs 1,800 crores were for Compound Semi / Display / ATMP / OSAT manufacturing and only Rs 1,000 crores for an order of magnitude higher capex intensive Si based CMOS Fab manufacturing along with Rs 200 crores for Design part of the value chain.
“However, we are particularly amazed by the high priority focus and relentless pursuit by Indian Government in the strategic area of Semiconductors in pursuing to bring home Si based CMOS Fab manufacturing – a key enabler for self reliance for chips aligned to various end markets and defense and national security,” adds Faruqui.
In simple terms, CMOS fab is a silicon based fab (28nm, 45nm), and these fabs produce products that go into multiple end markets such as automotives, consumer electronics, various other IoT devices as well. These are the main types of chips that the industry across different world region are focusing on.
“Through 2023, there has been multiple interests via Si based CMOS Fab proposals in India and we think that 230% YoY increase in 2024-25 Budget allocation of Rs 6,903 crores for the Semiconductors and Display manufacturing incentive schemes definitely displays confidence on India’s semiconductor roadmap execution and triggered by expectations of multiple Si based CMOS Fab in the mix,” adds Faruqui.
Based on 2023 and 2024 budget allocations, it is expected that multiple projects across Semiconductor and Display manufacturing ecosystem will start and require Capex incentives allocation through 2024 as the GOI fiscal support is on a pari passu basis.
Also Read: Budget 2024: FM Sitharaman presents 10 top achievements of Modi government in last 10 years
After announcing Rs 76,000 crore incentive for semiconductor and display fabs back in December 2021, the government has now allocated Rs 6,903 crore in interim budget 2024-25. This follows the non-planned allocation of Rs 3,000 crore in the Union Budget 2023-24. The allocated amount, which is expected to help in the development of semiconductors and display manufacturing ecosystems, is being hailed by the industry.
“The high priority allocated in Union Budget 2024 to the Programme for Development of Semiconductor and Display manufacturing ecosystem in India is commendable – we from the semiconductor industry has long awaited such formidable and bold semiconductor commitments from India,” says Danish Faruqui, CEO of Fab Economics, a US based boutique semiconductor ecosystem consultancy with broad macroeconomics capabilities.
In 2023-24, the Budget allocated Rs 3,000 crores for the Semiconductors and Display manufacturing incentive schemes and at that point of time, India’s positioning was more towards lower cost semiconductor manufacturing and lesser expectation on higher (an order of magnitude higher) cost Si based CMOS Fab. In the 2023-24 Budget allocation, Rs 1,800 crores were for Compound Semi / Display / ATMP / OSAT manufacturing and only Rs 1,000 crores for an order of magnitude higher capex intensive Si based CMOS Fab manufacturing along with Rs 200 crores for Design part of the value chain.
“However, we are particularly amazed by the high priority focus and relentless pursuit by Indian Government in the strategic area of Semiconductors in pursuing to bring home Si based CMOS Fab manufacturing – a key enabler for self reliance for chips aligned to various end markets and defense and national security,” adds Faruqui.
In simple terms, CMOS fab is a silicon based fab (28nm, 45nm), and these fabs produce products that go into multiple end markets such as automotives, consumer electronics, various other IoT devices as well. These are the main types of chips that the industry across different world region are focusing on.
“Through 2023, there has been multiple interests via Si based CMOS Fab proposals in India and we think that 230% YoY increase in 2024-25 Budget allocation of Rs 6,903 crores for the Semiconductors and Display manufacturing incentive schemes definitely displays confidence on India’s semiconductor roadmap execution and triggered by expectations of multiple Si based CMOS Fab in the mix,” adds Faruqui.
Based on 2023 and 2024 budget allocations, it is expected that multiple projects across Semiconductor and Display manufacturing ecosystem will start and require Capex incentives allocation through 2024 as the GOI fiscal support is on a pari passu basis.
Also Read: Budget 2024: FM Sitharaman presents 10 top achievements of Modi government in last 10 years