Nine months after the approval of the 'Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India', the government has harmonised incentives across silicon fab manufacturing. Ending ambiguity about different levels of incentives for different types and parts of the semiconductor ecosystem, this modification will now offer 50 per ecnt incentives for semiconductor fabs across the technology nodes, display fabs, packaging and more. The government has acted on the feedback and response received from the industry.
“We are discovering that the Indian market, and indeed on an ongoing basis, the trailing edge nodes, which is 65 nanometer (nm) and above, also has a huge potential in India. So, therefore, there will be no restriction on the silicon fabs on the node in terms of willingness investment in this incentive,” says Rajeev Chandrasekhar, Union Minister of State, Ministry of Electronics and Information Technology.
The buzzing word in the semiconductor space has been 7nm, 5nm, 3nm over the last few years, and 2nm in the near future. Commonly referred to as the leading edge nodes, these are usually used to power new-age flagship smartphones, laptops, advanced servers, and high-performance supercomputers on the cloud, to name a few. But all other electronics, right from the washing machine to fans, use trailing edge nodes, also known as legacy nodes. Interestingly, with the adoption of digitisation, IoT and smart appliances, there has been a constant demand for trailing edge nodes. But according to industry experts, the most prominent fab players, right from TSMC to Intel, to Samsung, are all keen on investing in legacy nodes.
When the scheme was launched in December 2021, even the Indian government’s initial focus was to pick investments in the leading-edge nodes. But many manufacturers were also looking at trailing edge nodes, but the difference in incentive slabs was a concern.
Explaining it further, the minister adds, “We have also come to the conclusion that the Indian market is as lucrative - 50 to 55% of it is trailing edge nodes. This is especially in automotive, power, telecom, low-end desktops, laptops, and in all of the other categories, which do not really use 7nm or 28nm type of semiconductors. We don't want to lose that in the process. Even to those, we want to give 50% support.”
The government is hopeful that this move of harmonizing the incentives will help the scheme attract more investments and new applications for the semiconductor policy.
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