Cabinet approves Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India

What is the news?

The Union Cabinet has approved a scheme to boost semiconductor and display manufacturing in the country. 

About Scheme for Development of Semiconductors and Display Manufacturing Ecosystem
Source: Business Standard

Aim: To provide attractive incentive support to companies that are engaged in Silicon Semiconductor Fabs (Fabrication plants), Display Fabs, Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT), Semiconductor Design.

Components of the Mission

 Semiconductor Fabs and Display Fabs: Under this, the Government shall extend fiscal support of up to 50% of project cost to eligible applicants. Govt will also work closely with the State Govts to establish High-Tech Clusters with requisite infrastructure for setting up at least two greenfield Semiconductor Fabs and two Display Fabs in the country.

Semi-conductor Laboratory (SCL): Under this, Ministry of Electronics and Information Technology will take requisite steps for modernization and commercialization of Semi-conductor Laboratory (SCL). MeitY will explore the possibility for the Joint Venture of SCL with a commercial fab partner to modernize the brownfield fab facility.

– Compound semiconductor units (which make chips that are used in mobile chargers, electric vehicles, and telecom radios) and ATMP facilities: Under this, the government will offer fiscal support of up to 30% of capital expenditure to the approved units. The government expects over 15 such units to come up in this space.

Semiconductor Design Companies or Design Linked Incentive (DLI) Scheme: Under this, Government shall extend product design linked incentive of up to 50% of eligible expenditure and product deployment linked incentive of 6% – 4% on net sales for five years.

India Semiconductor Mission: The Mission will be led by global experts in semiconductor and display industry.It will act as the nodal agency for efficient and smooth implementation of the schemes on Semiconductors and Display ecosystem.

– Chips to Startup Programme: Under this, the Government will create a talent pool of 85000 high-skilled engineers, which will help India in becoming a semiconductor hub. Semiconductor designers would be given the opportunity to launch start-ups.

What is the significance of this scheme?

Firstly, with the approval of this scheme, the Govt of India has announced incentives for every part of the supply chain including electronic components, sub-assemblies, and finished goods.

Secondly, the scheme will propel innovation and build domestic capacities to ensure the digital sovereignty of India. It will also create highly skilled employment opportunities to harness the demographic dividend of the country.

Source: This post is based on the following articles,

– “Cabinet approves Programme for Development of Semiconductors and Display Manufacturing Ecosystem in Indiapublished in PIB on 16th Dec 2021.

– “Union Cabinet approves ₹76,000-crore push for semiconductor makerspublished in The Hindu on 16th Dec 2021.

– “Union Cabinet approves ₹76,000-crore push for semiconductor makerspublished in PIB on 16th Dec 2021.

– “Govt’s Rs 76,000-cr plan to woo chip makers, create semiconductor ecosystem” published in Business Standard on 16th Dec 2021.

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