Semicon India Project

In News 

• Recently, the Ministry of Electronics and Information Technology has formed an advisory committee of experts to carry forward the country’s vision of making India a global leader in semiconductor manufacturing, design and innovation.

Advisory Committee

• About:
  • The Committee is mandated to provide key inputs for building a resilient supply chain, promoting investments, financing mechanisms, global engagement, research & innovation, and IP generation for the semiconductors and display ecosystem and enable an ecosystem to support startups and MSMEs.
  • It will help the ISM executives achieve their goals in a systematic, efficient, and strategic manner. 
  • It shall also provide insights and suggestions to develop a sustainable semiconductor and Display ecosystem in India. 
•  Composition:
  • The 17-member committee of experts, comprises senior government officials, academicians as well as industry and domain experts.

• Functions 
  • It  shall also provide inputs to the government in order to enable the building of a resilient supply chain, promote investments and ways of financing the semiconductor sector, research and innovation as well as intellectual property generation.
  • It shall work on various ways to enable and develop an ecosystem for semiconductor and display fabrication as well as for startups and micro, small and medium scale industries.

Semicon India Programme

• About:
  • The Union Cabinet had approved the comprehensive Semicon India programme with a financial outlay of INR 76,000 crore for the development of a sustainable semiconductor and display ecosystem in 2021.
  • It has been set up as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to formulate and drive India’s long term strategies for developing semiconductors and display manufacturing facilities and semiconductor design ecosystem. 
  • The Semicon India Program aims to provide attractive incentive support to companies / consortia that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT) and Semiconductor Design.
  • This will serve to pave the way for India’s growing presence in the global electronics value chains. 
  • The program will give an impetus to semiconductor and display manufacturing by facilitating capital support and technological collaborations.
• Broad Components of Programme:
  • Semiconductor Fabs and Display Fabs: The Scheme for Setting up of Semiconductor Fabs and Display Fabs in India shall extend fiscal support of up to 50% of project cost on the pari-passu basis to applicants who are found eligible and have the technology as well as capacity to execute such highly capital intensive and resource incentive projects. 
    • It provides fiscal support to eligible applicants for setting up of Semiconductor Fabs which is aimed at attracting large investments for setting up semiconductor wafer fabrication facilities in the country.
  • Semi-conductor Laboratory (SCL): The Ministry of Electronics and Information Technology will take requisite steps for the modernization and commercialization of the Semi-conductor Laboratory (SCL).
  • Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs and Semiconductor ATMP / OSAT Units: The Scheme for Setting up of Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs and Semiconductor ATMP / OSAT facilities in India shall extend fiscal support of 30% of capital expenditure to approved units. 
  • Semiconductor Design Companies: Design Linked Incentive (DLI) Scheme offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design. 
    • The scheme provides “Product Design Linked Incentive” of up to 50% of the eligible expenditure subject to a ceiling of ?15 Crore per application and “Deployment Linked Incentive” of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ?30 Crore per application.
• ‘Chips to start-ups’ programme:  
  • The “chips to start-ups” programme would develop 85,000 well-trained engineers.
  • Semiconductor designers would be given the opportunity to launch start-ups. 

Significance

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

• India imports 100 % of chips from Taiwan, Singapore, Hong Kong, Thailand and Vietnam, so do other countries in the world.
• The supply has been disrupted as a result of the COVID-19 pandemic, which forced many production centres to close intermittently.
  • Development of the semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain. 
• The program will promote higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025.
• 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.
• The approved programme will propel innovation and build domestic capacities to ensure the digital sovereignty of India. 

Challenges Associated

• The Mission  is highly dependent on Research and Development (R&D) and Intellectual Property (IP) protection, and hence extremely expensive. 
• Fabrication plants are highly capital-intensive due to ever-changing innovations in manufacturing abilities and reliance on specific equipment and chemicals. 
• Lack of uninterrupted power and water supply, and lack of long-term stable policies are significant impediments for the private industries to set up fabrication plants in India.
• India has a decent chip design talent but it never built up chip fab capacity.
• India’s ambitions towards self-sufficiency might be along similar lines, but there is a stark difference between the positions of those countries and India. The US, Japan, Taiwan, and South Korea already hold a major share of the production market at various stages of semiconductor manufacturing and have an advantage over the others, India’s current manufacturing capacity is not big enough to compete with the existing players.

Source:IE