India’s Semiconductor Roadmap Entails Big Investments Due to Geopolitics: Minister of State for Electronics and IT

The government’s roadmap for the semiconductor sector entails big investments due to geopolitical circumstances but it is giving equal importance to design and innovation, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Monday.

Speaking at 35th International VLSI and Embedded Systems Conference, Chandrasekhar said India’s performance during the COVID-19 pandemic has placed the country among experts in the technology space.

“Our ambitions specifically in the semiconductor space are very clear. Our ambition and our roadmap to semiconductor space involves obviously a big investment. It is natural given the geopolitics of the world in fabs (semiconductor fabrication) but as importantly as that is the ecosystem around innovation, design and systems.

“We are essentially investing government capital in creating skill…from the research side to the design engineering and testing and packaging workforce side,” the minister said.

The government has received proposals from five companies for setting up electronic chip and display manufacturing plants with investment of Rs. 1.53 lakh crore.

Vedanta Foxconn JV, IGSS Ventures, and ISMC propose to set up electronic chip manufacturing plants with $13.6 billion (about Rs. 1.02 lakh crore) investment. They have sought support of $5.6 billion (around Rs. 42,000 crore) from the Centre under the Rs. 76,000 crore Semicon India Programme.

The government is providing financial support of up to 40 percent for chips above 28 nanometre to 45nm, and up to 30 per cent for setting up manufacturing units for 45nm to 65nm wafers.

Vedanta and Elest have proposed to set up display manufacturing units that are used in mobile phones, laptops etc with projected investment of $6.7 billion (about Rs 50,000 crore). They have sought support of $2.7 billion (around Rs. 20,000 crore) from the Centre under the scheme for setting up of display fabs in India.

The Centre is also providing incentive on chip design, design infrastructure support, product design linked incentives, among others.

The incentives include reimbursement of up to Rs. 30 lakh per application for multi-project wafer fabrication for design, and 6-4 per cent reimbursement on net sales of designed semiconductor goods for five years starting financial year 2022-23.

“We in India today through a combination of polices, leadership vision are at an unprecedented inflection point in terms of growth and expansion of our technology sector. We have had a very long history of doing very well in technology services, outsourcing…,” Chandrasekhar said.

He added that India has created unicorns in the startup segment faster than any other economy in the world.

“If you take that as starting point and take the Prime Minister’s vision of ‘techade’ as the next point and look forward, it is clear that we today have runway of opportunities in the ESDM (electronics system design and manufacturing) space, in embedded design space and of course in semiconductor space.

“We are investing capital and encouraging entrepreneurship in startups in the design and innovation ecosystem. It is clear that our ambitions are real,” the minister said.