Semiconductors have become an indispensable part of modern technology. They are present in communications, computing, healthcare, military systems, transportation, consumer electronics, and others. Thus, you can realize that a shortage in this area will have widespread implications. This is exactly what happened as the global chip shortage started to plague industries since 2020.
This affected the production and manufacturing of vehicles of some of the biggest auto companies. Despite this, the global semiconductor chip industry is expected to grow by 10% this year to clock over $600 billion. The semiconductor market in India is a growing one as well and is slated to reach $63 billion by 2026.
Thus, it is hardly surprising that the Indian government will take steps to attract the attention of global chipmakers. Enter, the $10 billion Semicon India Programme, which aims to boost the development of the semiconductor and display industry in India. The first round of applications was received till February 15 for the establishment of Semiconductor and Display Fabs.
At that time, companies like Israel’s Tower Semiconductor, Taiwan’s Foxconn and a consortium from Singapore had shown interest in setting up chip factories in the country. And now, India has received investment proposals worth $20.5 billion from five companies to manufacture semiconductor and display fabs in the country and set up manufacturing units in India for the same.
The Ministry of Electronics and Information Technology said that they had received applications for setting up 28 nm (nanometer) to 65 nm semiconductor fabs with a capacity of approx 120,000 wafers per month. The ministry further stated, that despite aggressive timelines for the submission of applications, the programme is said to have elicited a good response.
Indian multinational conglomerate Vedanta had shown interest in the scheme from the start, and it is one of the companies to have submitted proposals. While Vedanta has entered into a joint venture with Taiwan’s Foxconn, Singapore-based IGSS Venture and ISMC have submitted proposals as well.
These companies have proposed to set up plants to manufacture electronic chips in the country with an investment worth $13.6 billion, and have sought the support of $5.6 billion from the government under the Semicon India Programme for the same. Additionally, Vedanta and Elest submitted applications for investments worth $6.7 billion to set up display fabrication units, and sought fiscal support of $2.7 billion from the government for the same.
Under the Semicon India Programme, there are incentives for setting up fabrication units by companies in the country. For setting up of silicon complementary metal-oxide semiconductors, the government will provide fabrication units that manufacture technology nodes of 28 nm or lower with up to 50% of the project cost, while for above 28 nm but up to 45 nm, up to 40% of the unit cost will be provided.