While the world is trying to erase the dents of covid followed by major chip shortage worldwide. India is trying to make its marks stronger in the semiconductor industry. India is one of the major consumers of electronics as being the second largest population of the world but not even a single manufacturing unit of semiconductor is established in India so far. Though Covid-19 has disrupted every industry, India is still hoping to make its way through the major industry of electronics. India’s huge effort to gatecrash this industry and its journey to become one of the leading manufacturers of semiconductor is epitomic.
India as leading manufacturer, investments and roadmap ahead
This pandemic has taught us way too many things, and one of the most important one being that India must take a lead in the manufacturing of semiconductors and display panels if we are to safeguard our economy and livelihoods against any other upcoming crises and changes.
The Indian government has some major footsteps that India is thinking of fully manufacturing instead some five years back, Indian industries were centered on trading goods and the maximum that companies came close to creating goods was by assembling raw materials to make products. The move by the Indian government to ban imports of CBUs (completely built-up) such as ACs and TVs did set the right example which led the way for local manufacturing in India.
The uplifted motivation and some government incentives are successful in leading India to be in talk for semiconductor assembly units. India’s Tata group is in talks with three states to invest up to $300 million to set up a semiconductor assembly and test unit. Tata is talking to the southern states of Tamil Nadu, Karnataka and Telangana and scouting for land for the outsourced semiconductor assembly and test (OSAT) plant.
Moving forward to the biggest provided incentive ever, yes this is about the red carpet incentives for semiconductor companies. The government is planning to provide incentives worth Rs 76,000 crore towards setting up over 20 semiconductor design, components manufacturing, and display fabrication (fab) units over the next six years, in a bid to make India a hub for electronics. These companies will include one to two fab units for displays, and 10 units each for designing and manufacturing components.
India needs to act fast though, there is a massive shortage and every single eyeball is focusing on it to turn this crisis into an opportunity.
Recent Initiative for Semiconductor Industry
- MeitY is actively working for the industry and it recently came up with a Chip to Startup The objective is to train about 85000 qualified and high quality engineers in the fields of Very Large-Scale Integration and Embedded System Design. It further has an aim of developing 175 ASICs (Application Specific Integrated Circuits), Working Prototypes of 20 System on Chips (SoC) and IP Core repository over a period of 5 years.
- With an overall vision to create a vibrant ecosystem for semiconductor chip design in the country, the Ministry of Electronics and Information Technology (MeitY) is seeking applications from 100 domestic companies, start-ups and MSMEs under its Design Linked Incentive (DLI) The Scheme was which was a part of Rs 76,000 crore (USD 10 billion) package that the government announced in December, aims to nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve turnover of more than Rs 1500 crore in the next five years.
- In order to drive the long-term strategies for developing a sustainable semiconductors and display ecosystem, a specialized and independent India Semiconductor Mission (ISM) will be set up. The mission will be led by global experts in the semiconductor and display industry. It will act as the nodal agency for efficient and smooth implementation of the schemes on semiconductors and display ecosystem.
- The minister of Electronics & IT Ashwini Vaishnaw has said this goal needs a long term thinking. We were thinking of some 50 companies to invite but after seeing the response, the number can reach upto 100 also. We already have some 85000 design engineers, we have a 20 year roadmap in mind. We are ready to execute but not as a single project instead a 20 year roadmap with more talented engineers, fabrication units, and co-operation.
- For chip plant setup, the government will provide up to 50% of the project cost to manufacturers looking to establish a facility to fabricate chips up to 28nm (nanometer), up to 40% of the cost for chips above 28nm and up to 45nm, and up to 30% for chips above 45nm and up to 65nm. Nm is one-billionth of a meter and, in semiconductors, represents the least distance between transistors in a chip. Chips are getting smaller and better as researchers find ways to reduce the distance between transistors. The support under the scheme shall be provided for six years. The tenure of the actual fiscal support outflow may be extended based on the approval of the electronics and IT minister.
Geographical, Capital & Infrastructure hotspots
Uttar Pradesh as the biggest hub for Semiconductor
Up is Armed with the new UP Electronics Manufacturing Policy 2020, which envisages a total investment of Rs 40,000 crore in the electronics/IT sector and creating 400,000 job opportunities, the state has started wooing the private sector players to set up semiconductor units in UP. Not just that Up’s CM Yogi Adityanath government has promised to offer a slew of incentives and support to the companies and technology startups for setting up semiconductor units in the state.
UP has been a hub for IT companies in the last 4-5 years, it has grown immensely in that field. Since, big companies from China, Taiwan and Korea have so far invested in the IT and electronics sector in UP, the semiconductor players would also decide favorably to invest in the state under the recently approved PLI scheme
Karnataka in the forefront to allot land
The Karnataka State Government is willing to provide 200 acres of land near Kempegowda International Airport (KIA) to facilitate the growth of semiconductor industries. The ecosystem for the flourishing of the electronics sector is very conducive and the country’s consumption per capita with regard to electronic goods is also increasing. If we have the infrastructure, we would be more than happy to provide it for the fabrication.
All the emerging industries such as robotics, artificial intelligence, medical devices, telemedicine, Industry 4.0, consumer electronics, space and defense, etc, primarily depend on electronics. Considering this, to facilitate the growth of the industry-government has come out with the Engineering Research & Development Policy and upgraded ITI’s, GTTC’s across the state together with revamping curriculum in higher education courses.
Semiconductor PLI: A Greater Clarity on Incentives
The so in talk 76000 crore incentive is issued for the development of fab units in India but no one has the clarity that it is a cash incentive, land subsidy, duty subsidy or all of it.Others have doubt that it is just a center’s fund or state can top up on it too. As earlier states have different Capex depending on the land, capital or labour infrastructure present in the state.
Though there are various confusions on the recent PLI scheme of INR 76,000 Cr but it is surely going to be game-changing. I am sure this proactive move by the government will greatly strengthen India’s vision to emerge as a significant player in the semiconductor ecosystem.”
Sheeba Chauhan | Sub Editor | ELE Times