Amid supply crunch, Rs76K crore push for making semiconductors

Tribune News Service

New Delhi, December 15

The Union Cabinet on Wednesday approved a Rs 76,000 crore (over $10 billion) programme for the development of a sustainable semiconductor and display manufacturing ecosystem in the country.

“The programme will usher in a new era in electronics manufacturing that shall pave the way for India’s technological leadership in these areas of strategic importance and economic self-reliance,” said an official news release.

Announcing the decision, IT Minister Ashwini Vaishnaw said semiconductors and displays (in short supply) were the foundation of modern electronics driving the next phase of digital transformation. “The programme aims to facilitate capital support and technological collaborations as semiconductor and display manufacturing is a complex and technology-intensive sector involving huge capital investments,” he said

The programme aims to provide incentive support to companies engaged in silicon semiconductor fabs, display fabs and semiconductor design.

For semiconductor and display fabs, the Centre will extend fiscal support of up to 50 per cent of the project cost as well as work closely with the states to set up high-tech clusters with the requisite infrastructure. The Cabinet also approved the modernisation and commercialisation of Semi-Conductor Laboratory.

In compound semiconductors etc., the Centre will extend fiscal support of 30 per cent of capital expenditure to approved units with the government expecting about 15 units to be set up.

The Centre also decided to extend the design linked incentive scheme to integrated circuits and IP cores, which provides companies with 50 per cent of eligible expenditure. The government will set up “India Semiconductor Mission (ISM)”, which will drive long-term strategies for developing a sustainable semiconductors and display ecosystem.

“In all, the government has committed support of Rs 2.30 lakh crore ($30 billion) to position India as global hub for electronics manufacturing with semiconductors,” said the official news release.

These steps will promote higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a $1 trillion digital economy and a $5 trillion GDP by 2025.