Semiconductors are the heart of every electronics yet around 169 industries globally are impacted by the shortage of these chips. As the majority of semiconductor chips are being manufactured in Taiwan and China, countries like the US and India have also joined the race to get more fabs.
The government of India has announced industry-friendly measures for the development of semiconductors and a display manufacturing ecosystem in the country. For the same, the Union Cabinet has approved a financial outlay of Rs 76,000 crore for the semiconductor manufacturing ecosystem in India, announcing incentives for every part of the supply chain including electronic components, sub-assemblies, and finished goods.
With multiple failed attempts at setting up semiconductor fab in the past, the government is positive about having fabs in the next six years in the country. Rajeev Chandrasekhar, Union Minister of State for Electronics and Information Technology, as well as for Skill Development and Entrepreneurship told Business Today, “I'm willing to concede that it's an unprecedented opportunity for India. we have a Prime Minister who understands the value of technology, a Prime Minister who's seen the opportunity for electronics in such clear terms from the very beginning. Plus, then there are people like me who have some experience in this space and who are in politics, and we have the entire stars aligned in terms of the post-COVID geopolitical scenario. So, I do believe that if we can’t do it this time, we will never be able to do it again, and I don't like to dwell on that at all. Instead, I think that this time around, we will do it. And I think that is the kind of confidence that the industry has. That is the confidence with which even the foreign partners, who today are being wooed by every country - every country is laying on the red carpet - look at India with a great amount of respect. Nobody is saying no to India.”
Industry sources say that the biggest semiconductor companies are already in talks with the government of India. Recently, Randhir Thakur, SVP and the president of Intel Foundry Services, a world-class service organisation with a strong focus on technology innovation and operational excellence lauded the government’s initiative tweeting “Congrats to
@GoI_MeitY @AshwiniVaishnaw @Rajeev_GoI for Semiconductor design & manufacturing incentives for India as hub for electronics & semiconductors. Glad to see a plan laid out for all aspects of the supply chain: talent, design, manufacturing, test, packaging & logistics.”
IT and Electronic Minister Ashwini Vaishnaw then responded by welcoming Intel to India (to set up semiconductor manufacturing). He tweeted “Intel – welcome to India”.
The government of India will work closely with the state governments to establish High-Tech Clusters with requisite infrastructure in terms of land, semiconductor grade water, high-quality power, logistics and research ecosystem to approve applications for setting up at least two greenfield Semiconductor Fabs and two Display Fabs in the country.
In all, incentive support of Rs 55,392 crore has been approved under PLI for Larges Scale Electronics Manufacturing, PLI for IT Hardware, SPECS Scheme and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme. In addition, PLI incentives to the quantum of Rs.98,000 crore are approved for allied sectors comprising ACC battery, auto components, telecom & networking products, solar PV modules and white goods. In total, the Government of India has committed support of Rs 2,30,000 crore to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block.
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