India has embarked on an ambitious journey to establish a robust semiconductor and display manufacturing ecosystem. This move promises to significantly bolster the country’s technological and economic landscape.
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a comprehensive program aimed at achieving this goal.
This initiative, known as the India’s Semiconductor Mission seeks to create a sustainable and globally competitive environment for semiconductor and display manufacturing.
By providing substantial incentive packages to companies involved in these high-tech sectors, the program aims to position India as a leader in electronics manufacturing, fostering economic self-reliance and paving the way for the next phase of digital transformation.
Significance of the Initiative
The significance of India’s initiative to develop a semiconductor and display manufacturing ecosystem cannot be overstated.
Semiconductors and displays form the backbone of modern electronics, driving advancements in various sectors, including communication, computing, healthcare, and automotive industries.
These components are crucial for the digital transformation under Industry 4.0, enabling the development of smarter and more efficient technologies.
The manufacturing of semiconductors and displays is highly complex, requiring massive capital investments, advanced technology, and long development periods.
This sector also faces rapid technological changes and high risks, making sustained and significant investment essential. By addressing these challenges through a comprehensive support program, India aims to create a conducive environment for these industries to flourish.
The initiative promises to enhance India’s technological capabilities and reduce dependence on global supply chains, thus securing strategic autonomy in critical technology areas.
Developing a local semiconductor and display manufacturing ecosystem is expected to create a multitude of high-skilled job opportunities, leveraging India’s demographic dividend.
This move is also strategically important for national security, ensuring trusted sources for critical information infrastructure.
In the broader economic context, this initiative is poised to have a multiplier effect, stimulating growth across various sectors and integrating India more deeply into the global value chain.
It aligns with India’s vision of achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025, significantly contributing to the country’s economic ambitions.
The Indian government’s initiative to boost semiconductor and display manufacturing includes several key incentives and support programs designed to attract and support companies in this high-tech sector.
A central element is the fiscal support provided to companies engaged in various facets of semiconductor and display manufacturing.
This includes up to 50% of the project cost for establishing Semiconductor Fabs and Display Fabs, which is crucial given the high capital and resource intensity of these projects.
The government will collaborate with state governments to develop High-Tech Clusters equipped with necessary infrastructure such as land, semiconductor-grade water, high-quality power, and logistics support.
Another important aspect is the modernization and commercialization of the Semi-conductor Laboratory, with plans for a joint venture with a commercial fab partner to upgrade the existing brownfield fab facility. This aims to enhance the technological capabilities and operational efficiency of SCL.
For Compound Semiconductors, Silicon Photonics, and Sensors Fabs, as well as Semiconductor ATMP/OSAT units, the scheme provides fiscal support of 30% of capital expenditure to approved units.
This initiative is expected to facilitate the establishment of at least 15 units in these categories, further strengthening the semiconductor ecosystem in India.
The Design Linked Incentive Scheme focuses on supporting semiconductor design companies by offering up to 50% of eligible expenditure for product design and additional incentives on net sales for five years.
This scheme aims to support 100 domestic companies involved in the design of Integrated Circuits, Chipsets, Systems on Chips Systems & IP Cores, and other semiconductor-linked designs.
The goal is to foster the growth of at least 20 companies with a turnover exceeding Rs.1500 crore in the next five years.
This initiative is part of a broader strategy to position India as a global hub for electronics manufacturing, with a total support package of Rs.2,30,000 crore aimed at various allied sectors, further underscoring the government’s commitment to transforming India’s technological landscape.
India’s Semiconductor Mission
The India Semiconductor Mission is a pivotal element of the nation’s strategy to establish a sustainable semiconductor and display manufacturing ecosystem.
ISM is designed to drive long-term strategy and ensure the efficient and smooth implementation of various support schemes. Led by global experts in the semiconductor and display industries, ISM will serve as the nodal agency, coordinating efforts across different stakeholders to achieve the mission’s goals.
The mission aims to attract top-tier companies and consortia engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors, Silicon Photonics, Sensors Fabs, Semiconductor Packaging, and Semiconductor Design.
By offering competitive incentive packages, ISM seeks to create a conducive environment for these high-tech sectors to thrive in India.
A key component of ISM’s strategy is the establishment of High-Tech Clusters in collaboration with state governments.
These clusters will provide the necessary infrastructure, such as semiconductor-grade water, high-quality power, logistics support, and research facilities, to support the development of at least two greenfield Semiconductor Fabs and two Display Fabs.
This initiative is crucial for building a robust manufacturing base and advancing technological capabilities within the country.
ISM also focuses on modernizing and commercializing the semiconductor laboratory, exploring joint ventures with commercial fab partners to upgrade the existing brownfield fab facility.
This modernization effort is aimed at enhancing the technological capabilities and operational efficiency of SCL, making it a key player in the national semiconductor ecosystem.
Through comprehensive support and a strategic approach, ISM is positioned to propel India towards becoming a global leader in semiconductor and display manufacturing, ensuring technological self-reliance and significant economic growth.
Long-term Vision and Goals
India’s long-term vision for the semiconductor and display manufacturing ecosystem encompasses several strategic goals aimed at transforming the country into a global leader in high-tech manufacturing.
One of the primary objectives is to integrate India more deeply into the global value chain, positioning the country as a key player in the international electronics market.
This integration is expected to enhance India’s competitiveness and facilitate higher domestic value addition in electronics manufacturing.
The initiative also aims to promote technological self-reliance, reducing dependence on global supply chains for critical components.
By developing a robust local manufacturing base, India seeks to ensure the security of its vital information infrastructure and achieve digital sovereignty.
This is particularly important in the current geopolitical context, where trusted sources of semiconductors and displays are of strategic importance.
Creating a vibrant semiconductor and display ecosystem is also seen as a catalyst for economic growth. The program is expected to have a multiplier effect across various sectors, stimulating innovation and fostering the development of advanced technologies.
This will contribute significantly to the growth of India’s digital economy, helping the country achieve its ambitious targets of a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025.
The initiative is poised to create a significant number of high-skilled employment opportunities, leveraging India’s demographic dividend.
By nurturing talent and fostering a skilled workforce, the program aims to build a strong foundation for sustained technological advancement and economic prosperity.
India’s initiative to develop a semiconductor and display manufacturing ecosystem marks a significant step towards technological leadership and economic self-reliance.
Through strategic incentives and the establishment of the India Semiconductor Mission, the country aims to position itself as a global hub for high-tech manufacturing.
This program not only addresses critical technological and economic challenges but also promises to create high-skilled jobs and contribute to India’s goal of achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025.
