Semiconductor, the main and most powerful ingredient in a desktop computer or a laptop or even your handheld devices. But unfortunately, India has never been able to make a mark in this segment. It has always been reliant on imports. Though there was an effort to start semiconductor manufacturing fab in Chandigargh, it turned out to be a big flop and major loss as the unit got burnt!
Realising that semiconductor manufacturing is a big business and it needs to be taken up more seriously, the Union government has come forward to infuse fresh impetus into the industry and help it grow in the country. Under the scheme, the government will provide incentives worth Rs 76,000 crore for semiconductor production over the next six years. The incentives would apply for every part of the supply chain including electronic components, sub-assemblies, and finished goods. Provisions, part of the scheme, include 25 per cent incentives on capital expenditure for establishing a unit of Compound Semiconductor Wafer Fabrication (Fab), assembly, testing, and packaging facility. It will also offer fiscal support of up to 50 per cent of project cost on the pari-passu basis to eligible applicants who possess the technology and capacity to execute the project.
One benefit is that the scheme is expected to generate around 1.35 lakh jobs over the next four years. It is also expected to attract investment of Rs 1.67 lakh crore and lead to production worth Rs 9.50 lakh crore. Ashwini Vaishnaw, Minister for Railways, Communications, Electronics & Information Technology, said “India’s main advantage is that it has the ‘entire design ecosystem’. There are around 24,000 design engineers which mean that there is no dearth of talent. India will follow the steps taken by major economies which offer 50 per cent capital incentive on setting up a semiconductor fab or a display fab. What sets it apart, however, is that it is also offering a very clear 20-year roadmap in advance with focus on generating that talent, nurturing that talent and making sure that as the industry grows.”
The Union government believes that the scheme will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology, ensure efficiencies, create economies of scale, enhance exports, and make India an integral part of the global supply chain.
The government is in talks with top global companies such as Taiwan Semiconductor Manufacturing Co, Intel, AMD, United Microelectronics Corp, and Fujitsu. Indian companies such as Tata Group and Vedanta have also expressed interest in locally manufacturing semiconductors.