India to throw billions at creating semiconductor manufacturing ecosystem

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Image: Semiconductor Industry Association

The government of India on Wednesday approved a deal that will see the nation put ₹2,30,000 crore, around $30 billion, behind a plan to turn India into a semiconductor manufacturing powerhouse.

Broken down, ₹76,000 crore has been slated for creating a so-called semiconductors and display manufacturing ecosystem, with fabs able to get up to 50% co-funding from New Delhi if approved.

“Government of India will work closely with the state governments establish High-Tech Clusters with requisite infrastructure in terms of land, semiconductor grade water, high quality power, logistics, and research ecosystem to approve applications for setting up at least two greenfield semiconductor fabs and two display fabs in the country,” it said in a statement.

The government added it would be putting ₹55,392 crore, around $7.5 billion, behind its electronics manufacturing schemes, which include large scale electronics manufacturing, IT hardware, promotion activities, and electronics manufacturing clusters.

A further ₹98,000 crore, around $13 billion, will be dedicated to manufacturing batteries and solar modules, automotive components, networking equipment, and white goods.

“In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure,” the government said.

“The approved program 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.”

Those involved in compound semiconductors, silicon photonics, and sensor fabrication will eligible for 30% of capital expenditure, while 100 design companies will capable of growing by ₹1,500 crore in five years will also get up to 50% of eligible expenditure covered based on net sales.

The government also said it would create the India Semiconductor Mission to oversee the ecosystem.

“The India Semiconductor 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,” it said.

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