The government will soon need to raise the outlay for the subsidy it grants for domestic semiconductor manufacturing units, from the current level of Rs 76,000 crore.
This is because after having approved five projects totalling worth Rs 1.52 lakh crore, 20 more such projects are before the India Semiconductor Mission, awaiting approval. Since the government provides 50% subsidy on the project cost, of the Rs 76,000 crore, roughly Rs 60,000 crore has already been tied up.
India Semiconductor Mission (ISM) CEO Akash Tripathi, on Monday said that the 20 projects, which are being examined for approval are across all domains including fabrication, display, compound semiconductors, assembly and testing.
“We need to look at developing the whole ecosystem for the semiconductor. Only fabs (chip fabrication units) will not suffice, only OSATs (outsourced semiconductor assembly and test) will not suffice. We need to support all the ecosystem of components,” Tripathi said at a media briefing session organised by SEMI and India Cellular and Electronics Association (ICEA) ahead of the Semicon India event, which will be held from September 11-13 in Noida.
Tripathi said that the government is looking at expanding the semiconductor incentive fund and the vision is to support the industry for at least 10 years. “We understand the requirement that we need to support various (semiconductor) components also. So, this is under deliberation,” he added.
With companies such as Micron, Tata-PSMC, CG Power, and Kaynes, among others, who are setting up their chip units in the country, their component suppliers would also need to set up their facilities here. Lately, there has been a demand to support the ancillary semiconductor industry as well with some kind of incentives.
The erstwhile scheme for promotion of manufacturing of electronic components and semiconductors (SPECS) also had incentives for semiconductor components.
Recently, the Maharashtra government announced the approval of Israel-based Tower Semiconductor’s Rs 84,000 crore chip fabrication project. The state government said Tower will set up the project with the Adani group.
When asked whether the companies have submitted proposal to ISM, Tripathi said, “Tower has submitted a proposal but they have to provide a detailed proposal. As and when they provide details we will examine it”.
Officials said that Tower has currently submitted a standalone proposal to ISM, and has not mentioned that Adani Group will be its partner.
All the five chip projects approved are expected to have a cumulative capacity of about 80 million chips per day, according to government estimates.
On the number of fabrication units, Tripathi said that the government had envisioned overall fab units to be in double digits in the country while formulating the ISM. “Under the Semicon India programme, we had envisioned 2-3 semicon fabs, 2-3 display fabs and also various compound semiconductor fabs. So, I think total numbers will be somewhere around in double digits,” he said.
Along with focusing on attracting the global players for the semiconductor facility, the government is also looking at modernising India’s own chip fabrication unit Semi-Conductor Laboratory (SCL), Mohali.
Tripathi said, many big private players have shown interest in modernisation of SCL and the government will float a request for proposal (RFP) soon.
Speaking at the event, Pankaj Mohindroo, chairman of ICEA said that India stands at the threshold of unshackling its immense potential in building a robust semiconductor ecosystem, and has all the right ingredients, including strong policy support and the willingness to lead.