In a bid to overcome the dependence on importing semiconductors and chips from other countries, the government has decided to invite new applications for setting up of Semiconductor Fabs and Display Fabs in India under the Modified Semicon India Programme.
From June 1, the applications will be received by India Semiconductor Mission, the designated nodal agency entrusted with the responsibility of implementing the Modified Semicon India Programme for development of semiconductors and display manufacturing ecosystem in India.
Semiconductors or chips are known as the brain and heart of the electronic devices being used throughout the world. Semiconductors are the tiny circuits that go into the making of computers, laptops, smartphones and other mobile communication devices, cars and aircrafts, military systems and other electrical devices and appliances.
The accelerated digitization around the globe along with the rise in OTT content has propelled a demand for electronic devices made of semiconductors. Besides, the work-from-home model adopted by many companies across the world following the Covid pandemic has further added to the growing demand for computers, laptops, smartphones and other such devices.
Under the Modified Programme, Fiscal Incentive of 50 per cent of the project cost is available to companies/consortia/ joint ventures for setting up of Semiconductor Fabs in India of any node (including mature nodes). Similarly Fiscal incentive of 50 per cent of the project cost is available for setting up of Display Fabs of specified technologies in India.
The application window of “Modified Scheme for setting up of Compound Semiconductors / Silicon Photonics/Sensors Fab/Discrete Semiconductors Fab and Semiconductor ATMP/OSAT facilities in India” would be open till December 2024. Application window of Design Linked Incentive Scheme is also open till December 2024. Till date 26 applications have been received under DLI Scheme and five applications have been granted approval, an official statement said.
India imported $5.38B in Semiconductor Devices in 2021, becoming the 7th largest importer of Semiconductor Devices in the world. At the same year, Semiconductor Devices was the 12th most imported product in India.
Reports say that with the advent of 5G, semiconductors consumption in India is expected to cross US$ 80 billion by 2026 and US$ 110 billion by 2030. There has been an unprecedented growth in the demand for computers, laptops, smart phones, and other devices. Government’s official estimate suggests that a US$ 300 billion of domestic electronic production is likely to need upwards of US$ 58 billion semiconductors by 2026. China, Taiwan, Vietnam and Korea are the major suppliers of semiconductors to India.
Government had launched the Semicon India Programme in December 2021 with an outlay of Rs 76,000 crore for the development of semiconductors and display manufacturing ecosystem in India. All applicants who had applied under the scheme for setting up of Semiconductor Fabs and Scheme for setting up of Display Fab (earlier schemes) are allowed to submit applications under Modified Scheme for setting up of Semiconductor Fabs and Modified Scheme for setting up of Display Fabs after incorporating suitable modification in their proposals.