Cabinet approved ₹76,000 crore scheme to boost semiconductor manufacturing

On December 15, 2021, Union Cabinet approved a Rs 76,000-crore scheme for boosting semiconductor and display manufacturing in India.

Highlights

  • This scheme was approved in order to position India as a global hub for hi-tech production, as well as to attract large chip makers.
  • It would also strengthen India’s ambitions to be self-reliant in electronics manufacturing and bring huge investments.
  • This move will generate 35,000 specialised jobs and indirect employment for one lakh people.

Significance of the semiconductor scheme

This move is significant because, in the present geopolitical scenario, trusted sources of semiconductors and displays have strategic importance. These are key to the security of critical information infrastructure. Furthermore, this scheme has been approved at a time when the world is witnessing a severe crunch of semiconductors, which is an important component of cars and electronic devices. Supply of semiconductors have disrupted due to pandemic.

Incentives under Semiconductor Scheme

Under the scheme, government has lined up incentives for companies engaged in silicon semiconductor fabs, compound semiconductors, display fabs, sensors fabs, silicon photonics, semiconductor packaging and semiconductor design. With the launch of this scheme, government expects investments of about Rs 1.7 lakh crore and 1.35 lakh jobs in upcoming four years.

Fabs and Units under the scheme

Under the semiconductor scheme, government is likely to establish at least two greenfield semiconductor fabs, two display fabs and 15 units of Compound Semiconductors & Semiconductor Packaging.

Design Linked Incentive (DLI) Scheme

Under the Design Linked Incentive (DLI) scheme, government will provide support to 100 domestic companies of semiconductor, systems & IP cores, design for Integrated Circuits (ICs), System on Chips (SoCs), Chipsets, and semiconductor linked design. This scheme will offer an incentive of up to 50 percent of eligible expenditure.

India Semiconductor Mission

Government will also set up an independent ‘India Semiconductor Mission (ISM)’, for driving the long-term strategies to develop a sustainable semiconductors and display ecosystem in India.

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